WEBVTT - Seth Godin

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<v Speaker 1>Welcome, Welcome, Welcome back to the Bob left Sets Podcast.

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<v Speaker 1>My guest today is business expert extraordinaire, the one and

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<v Speaker 1>only Seth Godin. Seth, good to have you on the podcast.

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<v Speaker 2>It's a treat I never thought it would happen, and

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<v Speaker 2>I never asked. And I've just been sitting here thinking Lefsets,

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<v Speaker 2>who has so generously chronicled the oral histories of so

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<v Speaker 2>many people who changed my life, my childhood, my young adulthood.

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<v Speaker 2>What I have impostered syndrome. I'm not sure why I

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<v Speaker 2>am here.

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<v Speaker 1>I'm not sure how to respond to that, So I'm

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<v Speaker 1>gonna jump right into the questioning. Okay, we just had

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<v Speaker 1>a presidential election. What did we learn about marketing in

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<v Speaker 1>this election? Let me just sort of set the landscape.

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<v Speaker 1>Traditionally it was a ground game, it was network TV.

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<v Speaker 1>There's a campaign where we saw the power of podcast.

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<v Speaker 1>What's your insight in terms of the selling of the candidates.

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<v Speaker 2>I think most people don't understand what marketing is. It's

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<v Speaker 2>not advertising or hype or hustle. It's not a logo.

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<v Speaker 2>It's this ephemeral, ephemeral story that doesn't easily have words

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<v Speaker 2>on it that we consume, and then we attach a

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<v Speaker 2>narrative to it. So I don't chime in about the

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<v Speaker 2>horse race of politics because it's a distraction and.

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<v Speaker 3>It's designed to divide us.

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<v Speaker 2>But I think we can learn a lot about which

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<v Speaker 2>stories resonate and why they resonate. And lots of people

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<v Speaker 2>in the music business understand intuitively that they're storytellers, but

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<v Speaker 2>they can't find words for it and figure out how

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<v Speaker 2>to put the words on it so that we can

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<v Speaker 2>tell a better story. Time to get back to what

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<v Speaker 2>people really want, which is affiliation, status, belonging, freedom from fear,

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<v Speaker 2>and believing that they were right all along. When those

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<v Speaker 2>things kick in, the story sticks and the words are secondary.

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<v Speaker 1>Okay, how important is the marketing relative to the quality

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<v Speaker 1>of the product itself.

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<v Speaker 2>The marketing is the product itself, So let's dissect that.

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<v Speaker 2>Quality has nothing to do with luxury or goodness or

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<v Speaker 2>whether you like it or not. Quality is whether it

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<v Speaker 2>meets speck. And so art has problems with quality because

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<v Speaker 2>there is no speck for a perfect Joni Mitchell song.

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<v Speaker 2>There is no speck for how do we create this

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<v Speaker 2>resonant story, because the second time we do it is

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<v Speaker 2>not art anymore. The second time we do it, we're

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<v Speaker 2>just a little bit more in tune. But back to

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<v Speaker 2>your original point, marketing that story that resonates with people,

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<v Speaker 2>we will make up all sorts of facts about its

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<v Speaker 2>quality to justify the fact that the story resonated with us.

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<v Speaker 2>So simple example, Saint poly Girl beer Beck's Light, Which

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<v Speaker 2>one do you like better?

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<v Speaker 1>Bob Well, I no longer drink, but when I did drink,

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<v Speaker 1>I liked Becks better.

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<v Speaker 2>But okay, it's exactly the same beer, made on exactly

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<v Speaker 2>the same assembly line, put into slightly different bottles. And

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<v Speaker 2>that's because the story of Saint Pauly Girls fraternity brothers

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<v Speaker 2>and the story of Beck's Light is yuppies, and they

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<v Speaker 2>told different stories, and people would argue about this, just

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<v Speaker 2>like in a double blind study you can't tell the

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<v Speaker 2>difference blindfolded between a Ford and a Chevy truck. But

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<v Speaker 2>they're Ford people and they're Chevy people. Because the story

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<v Speaker 2>is about identity. There is identity in being a Stones

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<v Speaker 2>fan instead a Beatles fan, and vice versa. And it's

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<v Speaker 2>this need that we have to live a life before

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<v Speaker 2>we die, to be part of something, to not be alone.

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<v Speaker 2>That's identity. And then identity can express itself through music,

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<v Speaker 2>and if you hear the song over and over and

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<v Speaker 2>over and over and over again, growing up becomes part

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<v Speaker 2>of your identity. It's not because it's quality, it's because

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<v Speaker 2>of who you are.

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<v Speaker 1>Okay, just to stay on that same theme, something has longevity, because.

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<v Speaker 2>So what did I buy when I bought a one

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<v Speaker 2>hit wonder top forty song that I was totally into

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<v Speaker 2>for a week? What I bought was it was going

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<v Speaker 2>to be replaced next week by a new one. That's

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<v Speaker 2>what teeny boppers do. What did I buy when I

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<v Speaker 2>became a Bruce Springsteen fan for life and pay six

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<v Speaker 2>hundred bucks to go see him? I bought the tribe.

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<v Speaker 2>I bought the circle of people that I identified with.

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<v Speaker 2>They're different products, and there have been people in the

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<v Speaker 2>music industry have been churning out the first one forever

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<v Speaker 2>and the second one we sort of back into. But

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<v Speaker 2>every once in a while a musician works hard to

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<v Speaker 2>build that arc to say, you know, I'm not sure

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<v Speaker 2>when the Warlocks decided that The Grateful Dead was going

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<v Speaker 2>to become a lifestyle, but it's pretty clear after a

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<v Speaker 2>couple of records that that's what they were committing to,

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<v Speaker 2>that they were making music for the family, not eagerly

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<v Speaker 2>trying to find new listeners.

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<v Speaker 1>Okay, if you started in the late sixties and the

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<v Speaker 1>sixties when the Warlocks turned to the Grateful Dead, everything

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<v Speaker 1>happened much more slowly. We hit the MTV era, where,

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<v Speaker 1>you know, in aligned with their logo of the rocket ship,

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<v Speaker 1>you could literally go from zero to hero overnight. But

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<v Speaker 1>it's well established that the faster you went up, the

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<v Speaker 1>faster you came down. So what can we say about

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<v Speaker 1>that ascension?

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<v Speaker 2>That's interesting. I was listening to your Dire Straits podcasts

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<v Speaker 2>a couple of weeks ago, and I'm not sure that

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<v Speaker 2>the evidence backs that up. I think that one of

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<v Speaker 2>the breakthroughs that happened for Dire Straits was MTV, and

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<v Speaker 2>yet today they're still part of the fabric of a

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<v Speaker 2>whole generation of people. One of the things that happens

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<v Speaker 2>when you get programmed because you buy your way or

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<v Speaker 2>luck your way into the top forty is by its nature,

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<v Speaker 2>most of the top forty is disposable. But then that's

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<v Speaker 2>part of the reason Billboard had to invent a new chart.

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<v Speaker 2>Because those other people who were selling and selling and

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<v Speaker 2>selling and selling and selling, they were important in the

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<v Speaker 2>music industry, but they weren't the hit of the day.

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<v Speaker 2>I don't know if that makes any sense.

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<v Speaker 3>You know way more about this thing.

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<v Speaker 1>No it does. I mean the case is the dire straits.

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<v Speaker 1>I don't want to get into the weeds, and that

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<v Speaker 1>most of their success was prior to the MTV era,

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<v Speaker 1>and then they blew up in the MTV era. I

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<v Speaker 1>don't want to, you know, split hairs here. But the

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<v Speaker 1>question is can I'll put it a different way. A

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<v Speaker 1>member of another band they said, we're afraid of having

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<v Speaker 1>a hit. This is in the modern era, it will

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<v Speaker 1>destroy our career. Yep, we're as it is so hard

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<v Speaker 1>to be recognized at all. And he was taking advice

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<v Speaker 1>from older acts who'd already had hits.

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<v Speaker 3>Yeah.

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<v Speaker 1>So you know, when you have this level of success,

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<v Speaker 1>you can't really plan it a lot of times anyway.

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<v Speaker 1>But I think today, to have some level of ubiquity

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<v Speaker 1>can only be a good thing.

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<v Speaker 2>No, no, it cannot only be a good thing. The

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<v Speaker 2>system wants to chew you up and spit you out.

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<v Speaker 2>I think it's worth asking the musician, what's this for?

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<v Speaker 2>This journey you're on? Why are you here? What are

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<v Speaker 2>you doing it for? If you're doing it to make

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<v Speaker 2>as much money as possible. You didn't pick a great

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<v Speaker 2>industry to do that. Because someone's going to win the lottery,

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<v Speaker 2>it's probably not going to be you. If you did

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<v Speaker 2>it to have this craft, you know. I'm a huge

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<v Speaker 2>fan of Patricia Barber. I was lucky enough to sort

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<v Speaker 2>of produce at an executive level one of her records.

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<v Speaker 3>But I've known her for a while.

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<v Speaker 2>Patricia Barber plays beautiful jazz piano, and first it was

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<v Speaker 2>at the Green Mill. Now it's at a different club

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<v Speaker 2>in Chicago. They basically turned the clobe over to her

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<v Speaker 2>once a week. The rest of the time, if she

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<v Speaker 2>wants to, she can sell out a pretty big jazz

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<v Speaker 2>club in New York if she wants to go on

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<v Speaker 2>the road. But once a week she shows up. That's

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<v Speaker 2>her living room and I'm talking to her and I said,

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<v Speaker 2>you've got that one song that gets everyone out of

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<v Speaker 2>their seats, that sits in the in the beautiful overlap

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<v Speaker 2>between jazz and pop. But most of the songs you're

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<v Speaker 2>playing are calmer than that, more melodic than that. Need

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<v Speaker 2>more insight than that.

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<v Speaker 3>What are you doing?

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<v Speaker 2>What's the goal here? And she said, my goal isn't

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<v Speaker 2>to sell records, right. My goal isn't to be famous.

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<v Speaker 2>My goal is to create the conditions for this music,

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<v Speaker 2>for this music to reach people. And if there's only

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<v Speaker 2>two hundred people in the room and she can do

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<v Speaker 2>it again next week, that's fine. So the trick that

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<v Speaker 2>social media and media before that has pushed on creators

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<v Speaker 2>is this, you know, it doesn't matter what you say

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<v Speaker 2>as long as you're famous and they spell your name right.

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<v Speaker 2>I think that's ridiculous. I think that makes the executives

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<v Speaker 2>at the record label happy, but I don't think that's

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<v Speaker 2>how you build the career you want to have.

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<v Speaker 1>So what comes first? You're in your bedroom, there's a

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<v Speaker 1>belief in yourself or is it the ta years of

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<v Speaker 1>music lessons? Or is it the people? You know? What's

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<v Speaker 1>the germination of this career?

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<v Speaker 2>So Dave Grohl wrote a book in which he argued

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<v Speaker 2>that it's what your mother did when you were eleven,

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<v Speaker 2>and he interviewed all these rock and roll moms, and

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<v Speaker 2>you know, we're all living in a high school for

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<v Speaker 2>the rest of our lives. High school does something to us.

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<v Speaker 2>And for pop music, it's from the stories I'm hearing.

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<v Speaker 2>It's often what happened in high school? How did that

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<v Speaker 2>help you find an identity? And then by hook er

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<v Speaker 2>by crook, who did you become? And so if we

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<v Speaker 2>think about someone like David Bowie, or we think about

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<v Speaker 2>other musicians who we think we know what they sound like,

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<v Speaker 2>and then you listen to their early music, they didn't

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<v Speaker 2>sound like that, right that.

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<v Speaker 3>What happened was.

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<v Speaker 2>They became whatever they needed to become to do their

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<v Speaker 2>music for the people they wanted to do their music for.

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<v Speaker 2>And that experimentation and exploration is driven by an unsatiable desire,

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<v Speaker 2>an empty hole that a certain kind of musician is

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<v Speaker 2>trying to fill. Sometimes they get fortunate and it happens

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<v Speaker 2>right when they needed to happen. Sometimes it happened sooner

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<v Speaker 2>than they needed to happen. I think Ricky Lee Jones,

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<v Speaker 2>it happened sooner than she was ready for it. But

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<v Speaker 2>when you watch what Ricky Lee Jones has done since

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<v Speaker 2>she blew up with a couple of records, is she

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<v Speaker 2>doesn't care how big the venue is. She wants to

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<v Speaker 2>play her music her way for the people she's playing

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<v Speaker 2>it for, to share the noise in her head with

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<v Speaker 2>other people. So I'm mixing together a bunch of ideas

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<v Speaker 2>about creativity here. But I don't think these people.

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<v Speaker 3>Were talking about are born that way? Really confident that

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<v Speaker 3>they are made, not born.

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<v Speaker 1>Okay, you're not born that way. What is the biggest

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<v Speaker 1>influence the mailstream of high school or your parents or

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<v Speaker 1>luck of the draw?

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<v Speaker 2>Yeah, it's all three, It's all three. What radio station

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<v Speaker 2>was playing every night when you went to sleep? You know,

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<v Speaker 2>you think that you were born to sing and perform

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<v Speaker 2>a certain way? Well, what a coincidence. No one's doing

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<v Speaker 2>that with this sitar because they weren't born in Bangalore, right,

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<v Speaker 2>And so the noise in your head combined with the

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<v Speaker 2>encouragement or discouragement you get, combined with your identity, combined

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<v Speaker 2>with did you get a call when you were at

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<v Speaker 2>Risdy to join Tina and David? Or didn't you because

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<v Speaker 2>if you didn't, we've never heard you play.

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<v Speaker 3>The bass or the or the drums.

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<v Speaker 1>Okay, breaking it down on a granular level, success, what

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<v Speaker 1>percentage is luck?

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<v Speaker 2>Well again, I keep playing with words with you, Bob.

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<v Speaker 2>I'm sorry, I'm not sure what you mean by success,

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<v Speaker 2>and I'm not sure what you mean.

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<v Speaker 1>Oh okay, okay, let's use conventional wisdom, which is not

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<v Speaker 1>internal success, but the measurable success of the external world.

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<v Speaker 1>It can be dollars, it can be chart positions, et cetera.

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<v Speaker 1>We live in a world where you have these billionaires

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<v Speaker 1>write books saying how I did it, but people don't

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<v Speaker 1>understand is that's how they did it. You can't replicate

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<v Speaker 1>those steps. If you know those people, they are unique individuals. Okay,

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<v Speaker 1>Then there are people who say, I'm sick of hearing

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<v Speaker 1>the rich people tell me how they did it. They

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<v Speaker 1>were just lucky. Whatever. Let let's let's go to Bill Gates.

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<v Speaker 1>Bill Gates was approached by IBM. They said they need

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<v Speaker 1>an operate system for their new computer system.

0:14:02.880 --> 0:14:05.560
<v Speaker 4>He didn't say I don't have that. He said, well,

0:14:05.559 --> 0:14:07.280
<v Speaker 4>hold on a second, I could do that for you.

0:14:07.360 --> 0:14:10.480
<v Speaker 4>I mean when bought some other operating system and sold them.

0:14:10.600 --> 0:14:14.720
<v Speaker 4>So the question is, no matter what he did, would

0:14:14.720 --> 0:14:17.040
<v Speaker 4>Bill Gates have been successful?

0:14:17.480 --> 0:14:22.840
<v Speaker 1>Okay? Or you know, are there people who are really

0:14:22.840 --> 0:14:25.320
<v Speaker 1>good but they just don't hit the right situation.

0:14:27.360 --> 0:14:29.800
<v Speaker 2>I have no doubt in my mind that every billionaire

0:14:29.840 --> 0:14:33.680
<v Speaker 2>that I've ever met is lucky. And Bill Gates was

0:14:33.760 --> 0:14:37.720
<v Speaker 2>lucky long before he got that call from IBM that

0:14:38.080 --> 0:14:40.920
<v Speaker 2>the books in which someone tells you here's how I

0:14:41.000 --> 0:14:47.080
<v Speaker 2>did it, are a selective recall of some lucky moments

0:14:47.120 --> 0:14:52.840
<v Speaker 2>interspersed with a small amount of grit and determination. It

0:14:52.920 --> 0:14:56.800
<v Speaker 2>is very clear that lots and lots and lots of

0:14:56.800 --> 0:15:00.960
<v Speaker 2>people are born with enough privileged to show up in

0:15:01.000 --> 0:15:05.960
<v Speaker 2>Silicon Valley and then fail, or that something goes well

0:15:06.560 --> 0:15:12.120
<v Speaker 2>and then they double down on it and they fail.

0:15:12.640 --> 0:15:15.240
<v Speaker 2>But sometimes they double down on it and it goes well.

0:15:15.800 --> 0:15:20.120
<v Speaker 2>So the mythology that this sort of external success is

0:15:20.160 --> 0:15:22.800
<v Speaker 2>completely earned is just mythology.

0:15:23.400 --> 0:15:24.800
<v Speaker 3>And you know so a.

0:15:24.840 --> 0:15:31.960
<v Speaker 2>Simple example, Yahoo was built on the Stanford computer system,

0:15:32.680 --> 0:15:38.920
<v Speaker 2>and as it grew, two students at Stanford were making

0:15:38.960 --> 0:15:40.800
<v Speaker 2>the thing work. Stanford calls them up and says, look,

0:15:40.840 --> 0:15:42.640
<v Speaker 2>you guys are using way too much bandwidth. We're kicking

0:15:42.720 --> 0:15:46.480
<v Speaker 2>you off. And they know my friend Lisa, and my

0:15:46.520 --> 0:15:49.840
<v Speaker 2>friend Lisa knows the people at Netscape. Now, the people

0:15:49.840 --> 0:15:52.920
<v Speaker 2>at Netscape at the time, we're getting more trafficked to

0:15:52.960 --> 0:15:55.080
<v Speaker 2>their website than almost any other website.

0:15:55.120 --> 0:15:58.680
<v Speaker 3>This is nineteen ninety five or six or something.

0:15:59.280 --> 0:16:03.800
<v Speaker 2>And if you went to Netscape, the homepage for the browser,

0:16:03.880 --> 0:16:06.800
<v Speaker 2>so when you turned on the best browser on the internet,

0:16:07.000 --> 0:16:09.640
<v Speaker 2>it took you to Netscape's homepage. There was a search box,

0:16:09.920 --> 0:16:11.720
<v Speaker 2>and they had a problem, which is people were typing

0:16:11.720 --> 0:16:15.080
<v Speaker 2>stuff into the search box and sometimes they would overload

0:16:15.520 --> 0:16:19.040
<v Speaker 2>whichever search engine you went to. So Netscape said, sure,

0:16:19.160 --> 0:16:23.800
<v Speaker 2>we'll put Yahoo on our servers so that way it

0:16:23.840 --> 0:16:27.320
<v Speaker 2>won't crash when we send people to them. If that

0:16:27.360 --> 0:16:30.120
<v Speaker 2>hadn't happened, you never would have heard of Yahoo. That

0:16:30.200 --> 0:16:32.480
<v Speaker 2>had nothing to do with David or Jerry. That had

0:16:32.480 --> 0:16:35.600
<v Speaker 2>to do with proximity, the luck of the draw, the

0:16:35.640 --> 0:16:40.080
<v Speaker 2>network effect, the multiplication of small advantages getting to be

0:16:40.120 --> 0:16:44.440
<v Speaker 2>bigger advantages. And the same thing's true for Howard Schultz.

0:16:44.760 --> 0:16:47.960
<v Speaker 2>He takes over a coffee shop that has two outlets

0:16:47.960 --> 0:16:52.480
<v Speaker 2>that doesn't sell coffee. Well, Howard had a really insightful

0:16:52.600 --> 0:16:56.600
<v Speaker 2>idea about what Starbucks could become, but it could just

0:16:56.640 --> 0:16:59.240
<v Speaker 2>as easily have been Pietz or somebody else that ended

0:16:59.320 --> 0:17:03.960
<v Speaker 2>upping the United States. I think we can set ourselves

0:17:04.040 --> 0:17:07.639
<v Speaker 2>up to increase the chances we get lucky, or to

0:17:07.760 --> 0:17:10.520
<v Speaker 2>multiply it once we do get lucky. But I don't

0:17:10.560 --> 0:17:13.600
<v Speaker 2>think people should bet their life on getting lucky.

0:17:14.960 --> 0:17:17.520
<v Speaker 1>Let me give a personal example. When I was living

0:17:17.600 --> 0:17:20.280
<v Speaker 1>as a ski bum in Utah. I was living with

0:17:20.320 --> 0:17:23.880
<v Speaker 1>these guys. They would meet people out on the hill

0:17:24.000 --> 0:17:27.400
<v Speaker 1>and they would invite them to stay with us. Okay,

0:17:28.160 --> 0:17:31.560
<v Speaker 1>and this I would never do anything like that. I

0:17:31.560 --> 0:17:34.280
<v Speaker 1>guess my upbringer, who are these people? Where are they

0:17:34.320 --> 0:17:38.400
<v Speaker 1>coming from? Taking to my house? Whatever? So is that

0:17:38.680 --> 0:17:44.280
<v Speaker 1>mindset ultimately working against my having lucky situations? Or is

0:17:44.320 --> 0:17:48.240
<v Speaker 1>it about finding your own situation where your personality works.

0:17:49.040 --> 0:17:52.760
<v Speaker 2>Okay, So now we're talking about strategy, and I love

0:17:52.800 --> 0:17:55.920
<v Speaker 2>talking about strategy. That's what my new books about. Strategy

0:17:56.680 --> 0:18:00.720
<v Speaker 2>is a philosophy of becoming. It's about seeing the system them.

0:18:01.000 --> 0:18:04.359
<v Speaker 2>So the strategy of the first person who funded my

0:18:04.400 --> 0:18:09.200
<v Speaker 2>internet company was if anybody had a pulse and an

0:18:09.240 --> 0:18:11.840
<v Speaker 2>internet company, he would write them a check for one

0:18:11.880 --> 0:18:14.239
<v Speaker 2>hundred thousand dollars because he had enough money to do

0:18:14.280 --> 0:18:18.680
<v Speaker 2>that eighty times, and he just believed that this thing

0:18:18.880 --> 0:18:22.000
<v Speaker 2>was going to go in a certain direction. If you

0:18:22.160 --> 0:18:26.639
<v Speaker 2>think about the strategy that someone like Barry Gordy brought

0:18:27.080 --> 0:18:30.600
<v Speaker 2>to building his record label, it wasn't are you a

0:18:30.640 --> 0:18:34.760
<v Speaker 2>guaranteed hit? It's do I think that this small amount

0:18:34.800 --> 0:18:36.560
<v Speaker 2>of money is going to take to record a track

0:18:36.920 --> 0:18:39.639
<v Speaker 2>from you is going to get me to the next level,

0:18:40.240 --> 0:18:45.240
<v Speaker 2>just be promiscuous about it. So perhaps these guys had

0:18:45.320 --> 0:18:49.840
<v Speaker 2>a strategy that said, more surface area, more exposure to

0:18:49.920 --> 0:18:52.200
<v Speaker 2>the kind of people who come here, will make our

0:18:52.240 --> 0:18:57.280
<v Speaker 2>lives more interesting. And if the strategy we bring to

0:18:57.359 --> 0:19:02.520
<v Speaker 2>whatever change we're making is working, fantastic, that's great. But

0:19:02.600 --> 0:19:05.320
<v Speaker 2>in the music business, particularly since it's changed in the

0:19:05.400 --> 0:19:11.359
<v Speaker 2>last twenty years, many of the strategies that we were

0:19:11.680 --> 0:19:16.320
<v Speaker 2>indoctrinated as music people to believe don't work anymore, and

0:19:16.359 --> 0:19:19.439
<v Speaker 2>it's boiling down for some of those people to I

0:19:19.480 --> 0:19:22.600
<v Speaker 2>hope I get lucky. That's not a strategy, that's just

0:19:22.640 --> 0:19:27.000
<v Speaker 2>a wish. And so when you see somebody who says, oh,

0:19:27.040 --> 0:19:29.840
<v Speaker 2>there's a new social media platform, my strategy is every

0:19:29.840 --> 0:19:32.480
<v Speaker 2>time there's a new social media platform, go in early

0:19:32.520 --> 0:19:35.920
<v Speaker 2>and make a splash, because I will have outsize influence

0:19:35.960 --> 0:19:38.119
<v Speaker 2>there and it's more likely I'll grow to the next step.

0:19:38.720 --> 0:19:41.639
<v Speaker 2>That's a strategy. It's not a strategy to say I'm

0:19:41.680 --> 0:19:43.360
<v Speaker 2>going to sound just like this person and I hope

0:19:43.359 --> 0:19:58.440
<v Speaker 2>I get more spins on Spotify.

0:19:53.200 --> 0:19:54.640
<v Speaker 1>Tell us more about your new book.

0:19:56.200 --> 0:20:00.160
<v Speaker 2>So a lot of people people like you will ask

0:20:00.240 --> 0:20:02.920
<v Speaker 2>me questions that they think are marketing questions, but they're

0:20:02.920 --> 0:20:06.240
<v Speaker 2>really strategy questions. And I don't do any coaching or consulting,

0:20:06.280 --> 0:20:09.520
<v Speaker 2>but I like chiming in with interesting problems. And I

0:20:09.680 --> 0:20:13.919
<v Speaker 2>found that people didn't see what I was seeing about strategy.

0:20:14.080 --> 0:20:19.840
<v Speaker 2>Strategy is games and empathy and systems and.

0:20:22.680 --> 0:20:22.960
<v Speaker 3>Time.

0:20:23.240 --> 0:20:28.520
<v Speaker 2>Games, empathy, systems and time, and if you can see them,

0:20:28.920 --> 0:20:33.000
<v Speaker 2>you can make a different path forward. Games are simply

0:20:33.080 --> 0:20:35.199
<v Speaker 2>I made this move, it didn't work. I'm not a

0:20:35.240 --> 0:20:37.920
<v Speaker 2>bad person. I just made the wrong move. I made

0:20:37.920 --> 0:20:39.280
<v Speaker 2>this move. They made that move.

0:20:39.400 --> 0:20:39.960
<v Speaker 3>In return.

0:20:40.880 --> 0:20:43.960
<v Speaker 2>Systems are what you've been writing about so eloquently for

0:20:44.000 --> 0:20:47.600
<v Speaker 2>all these years, right with personalities involved. But you see

0:20:47.680 --> 0:20:52.399
<v Speaker 2>the system, you see which forces push things in which direction.

0:20:53.720 --> 0:20:58.000
<v Speaker 2>Empathy is I don't know what you know. I don't

0:20:58.000 --> 0:21:00.680
<v Speaker 2>believe what you believe. I don't even want what you want.

0:21:01.040 --> 0:21:04.160
<v Speaker 2>But I'm going to bring you something that matches what

0:21:04.400 --> 0:21:08.720
<v Speaker 2>you believe you want. So if I'm a musician playing

0:21:08.720 --> 0:21:11.879
<v Speaker 2>my hit for the four thousandth time, no one in

0:21:11.960 --> 0:21:14.679
<v Speaker 2>that room has heard me play it four thousand times,

0:21:15.200 --> 0:21:16.920
<v Speaker 2>I am bringing it to them because they need to

0:21:16.920 --> 0:21:19.359
<v Speaker 2>hear it, not because I want to play it. So

0:21:19.400 --> 0:21:23.399
<v Speaker 2>it's a gift and time. Time is the key to

0:21:23.520 --> 0:21:25.560
<v Speaker 2>the whole thing in the music business. Not four or

0:21:25.560 --> 0:21:27.720
<v Speaker 2>four time or five to four of your Dave Brubeck,

0:21:28.320 --> 0:21:32.120
<v Speaker 2>but time says, the first day my record, my song

0:21:32.160 --> 0:21:33.560
<v Speaker 2>is out there, only one hundred people are going to

0:21:33.640 --> 0:21:35.800
<v Speaker 2>listen to it. What do I have to do to

0:21:35.800 --> 0:21:37.720
<v Speaker 2>make that one hundred go to two hundred, five hundred,

0:21:38.040 --> 0:21:43.320
<v Speaker 2>one thousand and a million. Over time, these things unfold.

0:21:44.240 --> 0:21:46.760
<v Speaker 2>And so when we think about the legends that are

0:21:46.760 --> 0:21:50.720
<v Speaker 2>still in our lives, like you know, Joni, part of

0:21:50.760 --> 0:21:52.399
<v Speaker 2>the reason is because she's been at this for a

0:21:52.520 --> 0:21:56.400
<v Speaker 2>very long time. And there are other people who did

0:21:56.440 --> 0:22:00.680
<v Speaker 2>a thing in nineteen sixty nine and then stopped fertilizing

0:22:01.040 --> 0:22:05.320
<v Speaker 2>and stopped planting, and so time ran out for them.

0:22:05.760 --> 0:22:09.159
<v Speaker 2>So what we're doing is planting seeds to create the

0:22:09.200 --> 0:22:11.879
<v Speaker 2>conditions for tomorrow.

0:22:14.040 --> 0:22:15.680
<v Speaker 1>You know, this is interesting. There are a couple of

0:22:16.560 --> 0:22:22.800
<v Speaker 1>classic examples in the music business of people who achieved

0:22:22.800 --> 0:22:27.080
<v Speaker 1>great success and then intentionally went in a different direction,

0:22:27.960 --> 0:22:31.680
<v Speaker 1>alienating their audience. So you have people like Neil Young,

0:22:31.960 --> 0:22:35.919
<v Speaker 1>he doesn't want to be pigeonholed. You have someone like

0:22:36.119 --> 0:22:39.439
<v Speaker 1>Bob Doing, who happens to be eighty three. He is

0:22:39.480 --> 0:22:44.000
<v Speaker 1>on the road singing material that most people cannot recognize,

0:22:44.040 --> 0:22:48.080
<v Speaker 1>even when it's well known material. Are we just saying

0:22:48.240 --> 0:22:51.880
<v Speaker 1>he's saying to himself, I am this old. I can

0:22:51.960 --> 0:22:54.680
<v Speaker 1>do it however I want to. Or do you think

0:22:54.720 --> 0:22:59.880
<v Speaker 1>he has a conscious strategy?

0:22:59.680 --> 0:23:02.520
<v Speaker 2>So this is where the art comes in. And this

0:23:02.560 --> 0:23:08.119
<v Speaker 2>is why I have so much respect for people like

0:23:08.240 --> 0:23:13.480
<v Speaker 2>Herbie Hancock and Miles Davis and what Dylan decided to

0:23:13.520 --> 0:23:16.920
<v Speaker 2>do several times in his career, the willingness to get

0:23:17.000 --> 0:23:22.240
<v Speaker 2>booed offstage because the musicians say, I got into this

0:23:22.359 --> 0:23:25.000
<v Speaker 2>business because I want freedom. I got into this business

0:23:25.040 --> 0:23:26.800
<v Speaker 2>because I want to let the muse out. I got

0:23:26.840 --> 0:23:28.960
<v Speaker 2>into this business because I want to be a musician,

0:23:29.480 --> 0:23:34.960
<v Speaker 2>not a cover band. And yet almost all the people

0:23:34.960 --> 0:23:36.440
<v Speaker 2>who have been at this for a long time are

0:23:36.440 --> 0:23:41.640
<v Speaker 2>cover bands of their former selves, and they gave up

0:23:41.680 --> 0:23:45.360
<v Speaker 2>the dream in order to be popular. So when Miles

0:23:45.400 --> 0:23:48.040
<v Speaker 2>played with his back to the audience, or when Dylan,

0:23:48.880 --> 0:23:52.560
<v Speaker 2>according to his fictional autobiography, intentionally went back to the

0:23:52.600 --> 0:23:55.480
<v Speaker 2>same city three years in a row, and what it

0:23:55.520 --> 0:23:58.480
<v Speaker 2>says is the first year, what I'll do is I'll

0:23:58.520 --> 0:24:00.800
<v Speaker 2>offend the fans who came to hear the old me.

0:24:01.720 --> 0:24:04.520
<v Speaker 2>The second year, the people I didn't offend will bring

0:24:04.600 --> 0:24:09.040
<v Speaker 2>their friends, and then the third year I'll have my audience. Right,

0:24:09.080 --> 0:24:14.000
<v Speaker 2>there was this act of independence. So I don't know Bob.

0:24:14.080 --> 0:24:16.120
<v Speaker 2>I have no idea what noise he's got in his head.

0:24:16.160 --> 0:24:21.840
<v Speaker 2>And lots of strategies are intuitive. But as a creator me,

0:24:22.760 --> 0:24:26.760
<v Speaker 2>I regularly don't do sequels. I am trying very hard

0:24:27.040 --> 0:24:30.600
<v Speaker 2>not to be a cover band of me because I

0:24:30.640 --> 0:24:33.879
<v Speaker 2>got into this because I want to make art, not

0:24:33.880 --> 0:24:35.040
<v Speaker 2>because I want to be popular.

0:24:37.920 --> 0:24:40.640
<v Speaker 1>Okay, I just want to don and I from earlier

0:24:40.640 --> 0:24:44.959
<v Speaker 1>in on conversation, you're talking about the motivation of musicians

0:24:45.000 --> 0:24:48.720
<v Speaker 1>in high school and you talk about filling a hole inside.

0:24:48.800 --> 0:24:50.440
<v Speaker 1>Can you amplify that for us?

0:24:50.720 --> 0:24:51.040
<v Speaker 3>Okay?

0:24:51.119 --> 0:24:55.800
<v Speaker 2>So this the insatiable needs. That is how you become

0:24:55.840 --> 0:24:58.680
<v Speaker 2>a billionaire. That is how you build something for the ages.

0:24:59.400 --> 0:25:02.720
<v Speaker 2>Everyone has a need for lunch every day, but it's

0:25:02.720 --> 0:25:06.040
<v Speaker 2>not insatiable. We don't eat lunch four times a day.

0:25:06.160 --> 0:25:09.600
<v Speaker 2>One lunch is enough for most people. But we have

0:25:09.640 --> 0:25:14.800
<v Speaker 2>an insatiable need to be loved often, or to be respected,

0:25:15.400 --> 0:25:19.280
<v Speaker 2>or to achieve something. And what often happens when someone

0:25:19.320 --> 0:25:22.480
<v Speaker 2>becomes successful is they try to top what happened to

0:25:22.520 --> 0:25:25.119
<v Speaker 2>them last time, which is why it's so difficult to

0:25:25.119 --> 0:25:27.160
<v Speaker 2>win a gold medal in the Olympics, because you might

0:25:27.200 --> 0:25:30.159
<v Speaker 2>not be able top that again. And so if that

0:25:30.359 --> 0:25:34.000
<v Speaker 2>was your need to show the naysayas they were wrong

0:25:34.080 --> 0:25:37.640
<v Speaker 2>and to always get a better personal best, you better

0:25:37.680 --> 0:25:39.320
<v Speaker 2>find a new way to make a living because you're

0:25:39.359 --> 0:25:43.960
<v Speaker 2>not going to find it running to decathlon again. And

0:25:44.800 --> 0:25:50.480
<v Speaker 2>so what happens often for the driven musician is, yeah,

0:25:50.600 --> 0:25:52.960
<v Speaker 2>I'm in another city twenty three out of twenty four

0:25:53.040 --> 0:25:56.720
<v Speaker 2>days in a row, in another grimy bar. But here

0:25:56.800 --> 0:25:59.439
<v Speaker 2>is that chance to fill that hole again. And I

0:25:59.480 --> 0:26:03.119
<v Speaker 2>know it's not going to be filled forever, but filling

0:26:03.160 --> 0:26:05.520
<v Speaker 2>it tonight is the most important thing in the world

0:26:05.560 --> 0:26:08.479
<v Speaker 2>to me. So someone like Springsteen, who's worth more than

0:26:08.480 --> 0:26:10.879
<v Speaker 2>half a billion dollars, how much would you have to

0:26:10.880 --> 0:26:13.720
<v Speaker 2>pay him to go do a performance he doesn't feel

0:26:13.760 --> 0:26:16.960
<v Speaker 2>like you couldn't. What he feels like is filling the

0:26:16.960 --> 0:26:18.040
<v Speaker 2>hole at least for now.

0:26:19.840 --> 0:26:22.600
<v Speaker 1>Okay. I have a theory. People always ask how come

0:26:22.680 --> 0:26:27.359
<v Speaker 1>these people have hits and then they dry up. Most

0:26:27.359 --> 0:26:31.159
<v Speaker 1>of the people from the classic era today the landscape's different.

0:26:31.560 --> 0:26:36.520
<v Speaker 1>Classic era. These were alienated people, didn't interact that well

0:26:36.800 --> 0:26:40.240
<v Speaker 1>to use the vernacular, couldn't get laid. So they work

0:26:40.320 --> 0:26:44.800
<v Speaker 1>with this incredible effort. They get wealth, they get sex,

0:26:45.400 --> 0:26:48.520
<v Speaker 1>and they realize it still doesn't fill the hole, and

0:26:48.560 --> 0:26:50.480
<v Speaker 1>then they just don't have the motivation anymore. They just

0:26:50.520 --> 0:26:51.400
<v Speaker 1>can't do it anymore.

0:26:52.320 --> 0:26:53.840
<v Speaker 3>I think as part of it, I think.

0:26:55.119 --> 0:26:58.880
<v Speaker 2>A very big part of it is a fear of

0:26:58.920 --> 0:27:02.320
<v Speaker 2>being seen as a front odd fear of failing from

0:27:02.359 --> 0:27:08.000
<v Speaker 2>the perch that they're on. And so if you don't

0:27:08.600 --> 0:27:13.640
<v Speaker 2>push outside of the new comfort zone, then you can't

0:27:13.640 --> 0:27:16.399
<v Speaker 2>get in trouble. If you stay in the new comfort zone,

0:27:16.720 --> 0:27:18.560
<v Speaker 2>you're back to being a cover band, and cover bands

0:27:18.600 --> 0:27:22.320
<v Speaker 2>don't get booed off stage. And so it takes a

0:27:22.440 --> 0:27:25.520
<v Speaker 2>much deeper hole to have to decide, Okay, I'm going

0:27:25.600 --> 0:27:28.520
<v Speaker 2>to do a completely different thing and I'm going to

0:27:28.560 --> 0:27:32.280
<v Speaker 2>fail at it. And you know, Billy Joel and Paul

0:27:32.359 --> 0:27:36.879
<v Speaker 2>McCartney and Sting make classical music albums. Well, they knew

0:27:36.960 --> 0:27:40.600
<v Speaker 2>intellectually that the classical music world wasn't going to embrace them,

0:27:41.640 --> 0:27:45.639
<v Speaker 2>but they needed the feeling that would come from going

0:27:45.680 --> 0:27:48.359
<v Speaker 2>way outside that comfort zone, even if it meant that

0:27:48.440 --> 0:27:49.400
<v Speaker 2>it wasn't going to work.

0:27:52.119 --> 0:27:58.480
<v Speaker 1>Okay, So once again, how much of this is conscious

0:27:58.960 --> 0:28:01.520
<v Speaker 1>and how much is just intuitive? And does it depend

0:28:01.600 --> 0:28:03.000
<v Speaker 1>what walk of life you're in.

0:28:04.520 --> 0:28:07.440
<v Speaker 2>So I was talking to a friend of mutual friend

0:28:07.440 --> 0:28:10.880
<v Speaker 2>of ours who has made many gold and platinum records,

0:28:11.280 --> 0:28:15.480
<v Speaker 2>and I said to him, so, what's the secret of

0:28:15.920 --> 0:28:17.760
<v Speaker 2>a hit record? He said, Oh, it's the song, There's

0:28:17.760 --> 0:28:19.560
<v Speaker 2>no question about it. You got to find a great song.

0:28:20.440 --> 0:28:21.680
<v Speaker 2>I said, well, how do you know if it's a

0:28:21.680 --> 0:28:25.480
<v Speaker 2>great song? He said, because it's a hit record, And

0:28:26.320 --> 0:28:31.280
<v Speaker 2>he had no words to describe the intuition. So there

0:28:31.280 --> 0:28:35.800
<v Speaker 2>are many industries where intuition drives the whole thing. And

0:28:35.840 --> 0:28:40.040
<v Speaker 2>then there are other industries, like I would say heart surgery,

0:28:40.600 --> 0:28:44.040
<v Speaker 2>where being a scholar of it definitely helps you do

0:28:44.120 --> 0:28:49.040
<v Speaker 2>better because the words help you improve quality as you go.

0:28:49.600 --> 0:28:51.480
<v Speaker 2>So if you look at the way they used to

0:28:51.480 --> 0:28:57.120
<v Speaker 2>make cars, the crafts people on the Rolls Royce assembly

0:28:57.200 --> 0:29:02.000
<v Speaker 2>line could feel whether the piece of metal was going

0:29:02.040 --> 0:29:04.000
<v Speaker 2>to be stressed or not. They could feel how it

0:29:04.040 --> 0:29:08.280
<v Speaker 2>should fit together. You can't build a Toyota by doing that.

0:29:08.920 --> 0:29:12.440
<v Speaker 2>You build a Toyota by using words and measurement for everything.

0:29:13.760 --> 0:29:19.080
<v Speaker 3>So I think we have failed every.

0:29:19.000 --> 0:29:22.120
<v Speaker 2>Time we've tried to come up with words and algorithms

0:29:22.120 --> 0:29:26.160
<v Speaker 2>for making hit music that lasts for the ages. But

0:29:26.200 --> 0:29:30.920
<v Speaker 2>I think it's very clear that words help record executives

0:29:31.640 --> 0:29:35.480
<v Speaker 2>do much better because now if they can articulate to

0:29:35.520 --> 0:29:37.640
<v Speaker 2>people what they're trying to do, they can get other

0:29:37.680 --> 0:29:40.920
<v Speaker 2>people to do it with them.

0:29:41.120 --> 0:29:44.520
<v Speaker 1>Okay, staying with the music business and staying with the

0:29:44.520 --> 0:29:52.240
<v Speaker 1>traditional executives, the traditional pillars of success, print, radio, physical

0:29:52.280 --> 0:29:57.360
<v Speaker 1>distribution have all been decimated such that a lot of

0:29:57.440 --> 0:30:03.960
<v Speaker 1>things start independently, whether the especially online. To what degree

0:30:05.040 --> 0:30:08.280
<v Speaker 1>must you change your philosophy with the external and what

0:30:08.360 --> 0:30:10.600
<v Speaker 1>are they not seeing about the future?

0:30:11.720 --> 0:30:14.200
<v Speaker 2>Okay, so you've taught me so much about this, but

0:30:14.320 --> 0:30:16.360
<v Speaker 2>let me try to use a different story to help

0:30:16.400 --> 0:30:21.600
<v Speaker 2>people understand the system. There were two key things that

0:30:21.720 --> 0:30:24.880
<v Speaker 2>most people would not name that led to pop music

0:30:24.920 --> 0:30:28.160
<v Speaker 2>as we know it. The first one is the law

0:30:28.200 --> 0:30:32.920
<v Speaker 2>of physics that affects spectrum of the radio. There can

0:30:33.080 --> 0:30:35.920
<v Speaker 2>only be a few radio stations in a city, and

0:30:35.960 --> 0:30:38.120
<v Speaker 2>when you're add FM, it goes up by double but

0:30:38.200 --> 0:30:41.040
<v Speaker 2>that's it. There can only be a few. And number

0:30:41.040 --> 0:30:45.320
<v Speaker 2>two the headphone jack. When Sony came out with the

0:30:45.320 --> 0:30:49.160
<v Speaker 2>transistor radio. The breakthrough was it had a headphone jack,

0:30:49.200 --> 0:30:51.840
<v Speaker 2>and so for the first time in recorded history, teenagers

0:30:51.880 --> 0:30:54.480
<v Speaker 2>did not have to listen to the music their parents

0:30:54.520 --> 0:30:58.160
<v Speaker 2>were listening to. It made it so that teenagers, it

0:30:58.200 --> 0:31:02.320
<v Speaker 2>invented teenagers could find what their peers were doing instead

0:31:02.320 --> 0:31:03.840
<v Speaker 2>of having to sit in the living room.

0:31:03.720 --> 0:31:04.400
<v Speaker 3>With their parents.

0:31:05.080 --> 0:31:10.120
<v Speaker 2>Those two things created a forty year cycle that brought

0:31:10.200 --> 0:31:14.600
<v Speaker 2>us all this classic music. And what happened, well, we

0:31:14.680 --> 0:31:17.920
<v Speaker 2>got rid of radio and we don't need the headphone

0:31:18.000 --> 0:31:23.520
<v Speaker 2>jack anymore. The end result is there is no scarcity

0:31:23.560 --> 0:31:27.640
<v Speaker 2>of spectrum. There is no desire for the shorthad. The

0:31:27.720 --> 0:31:32.520
<v Speaker 2>long tail is real. People connecting with small circles of

0:31:32.560 --> 0:31:39.560
<v Speaker 2>people is real, and the music industry is gone. We

0:31:39.640 --> 0:31:43.680
<v Speaker 2>have music, more music than ever before. But the industry

0:31:43.720 --> 0:31:46.720
<v Speaker 2>cannot be called the industry the way it was because

0:31:46.760 --> 0:31:50.520
<v Speaker 2>it's not a few assembly lines turning out stuff that

0:31:50.560 --> 0:31:55.000
<v Speaker 2>are hits. It is instead this permeable long tail. The

0:31:55.080 --> 0:31:57.760
<v Speaker 2>same thing has happened in my industry of books. The

0:31:57.840 --> 0:31:59.800
<v Speaker 2>number of books published every year has gone up by

0:31:59.800 --> 0:32:03.880
<v Speaker 2>a factor of twenty five, and the laydown of a

0:32:03.920 --> 0:32:06.360
<v Speaker 2>new book, meaning how many of the stores take in

0:32:06.400 --> 0:32:09.840
<v Speaker 2>the first week is down by a factor of twenty

0:32:10.800 --> 0:32:13.520
<v Speaker 2>and so yeah, that's what decimated means ninety percent gone.

0:32:14.800 --> 0:32:18.600
<v Speaker 2>And we're going to need a new model if we

0:32:18.720 --> 0:32:22.600
<v Speaker 2>want musicians to make a living, and we need definitely

0:32:22.600 --> 0:32:25.320
<v Speaker 2>need a new model if the people who help musicians

0:32:25.360 --> 0:32:26.120
<v Speaker 2>and get paid.

0:32:25.880 --> 0:32:27.200
<v Speaker 3>For it are going to make a living.

0:32:28.400 --> 0:32:31.479
<v Speaker 1>Let's stay with books for a second, your area of

0:32:31.600 --> 0:32:34.920
<v Speaker 1>true expertise. What's the future for books?

0:32:36.120 --> 0:32:42.200
<v Speaker 2>So five hundred years, a book is a physical object,

0:32:42.360 --> 0:32:44.360
<v Speaker 2>and in order to get a book into a bookstore,

0:32:44.400 --> 0:32:47.200
<v Speaker 2>another book has to leave the bookstore because the bookstores

0:32:47.200 --> 0:32:51.200
<v Speaker 2>can't get any bigger. And this physical object that we

0:32:51.240 --> 0:32:54.400
<v Speaker 2>had to spend years of our lives writing and bringing

0:32:54.440 --> 0:32:59.360
<v Speaker 2>to you that effort is received by the reader. It

0:32:59.440 --> 0:33:02.800
<v Speaker 2>means this is important. It's not a blog post someone

0:33:02.800 --> 0:33:07.360
<v Speaker 2>about in fifteen minutes. Someone invested in this. So there's

0:33:07.400 --> 0:33:10.160
<v Speaker 2>a lot to be said for the Pristian value of

0:33:10.360 --> 0:33:14.440
<v Speaker 2>I am holding this artifact. But it has been ripped

0:33:14.560 --> 0:33:18.360
<v Speaker 2>to shreds, not with mal intent, but for sure by

0:33:18.400 --> 0:33:23.840
<v Speaker 2>Amazon and Audible because it's very hard to tell a

0:33:23.840 --> 0:33:26.760
<v Speaker 2>page of a kindle book from a blog post, from

0:33:26.800 --> 0:33:32.680
<v Speaker 2>a series of tweets. And when we atomized ideas we

0:33:33.240 --> 0:33:35.600
<v Speaker 2>rip the heart out of the industry. Add to that,

0:33:35.640 --> 0:33:38.800
<v Speaker 2>the death of the independent bookstore and book publishing is

0:33:38.800 --> 0:33:42.720
<v Speaker 2>on fumes, and it only survives because of the backlist.

0:33:43.000 --> 0:33:46.320
<v Speaker 2>It only survives, as you've talked about, because of the

0:33:46.400 --> 0:33:48.600
<v Speaker 2>royalties you're making from the stuff you published ten or

0:33:48.640 --> 0:33:51.680
<v Speaker 2>twenty years ago. This is a crazy time to start

0:33:51.720 --> 0:33:55.000
<v Speaker 2>a new publishing company, which I just started working with.

0:33:57.320 --> 0:34:00.000
<v Speaker 2>But books matter still, particularly to people of our general

0:34:00.600 --> 0:34:05.040
<v Speaker 2>because they're a symbol and a totem. And I don't

0:34:05.080 --> 0:34:08.759
<v Speaker 2>think we're ever going to see books be more important

0:34:08.800 --> 0:34:12.320
<v Speaker 2>than they are today. And books are way less important

0:34:12.360 --> 0:34:13.560
<v Speaker 2>than they were twenty years ago.

0:34:14.880 --> 0:34:19.440
<v Speaker 1>Okay, you have a new book, so what's the strategy.

0:34:19.520 --> 0:34:23.120
<v Speaker 2>So my strategy, which because I'm a writer I've said

0:34:23.120 --> 0:34:28.280
<v Speaker 2>out loud, is this. I stopped looking for new readers

0:34:29.480 --> 0:34:34.440
<v Speaker 2>twenty years ago because I found chasing new readers would

0:34:34.520 --> 0:34:37.719
<v Speaker 2>force me to be a writer. I didn't want to

0:34:37.760 --> 0:34:40.040
<v Speaker 2>be writing about stuff I didn't want to write about.

0:34:40.520 --> 0:34:42.799
<v Speaker 1>Could you just be a little deeper? What would you

0:34:42.920 --> 0:34:44.360
<v Speaker 1>not want to be? What would you not want to

0:34:44.400 --> 0:34:44.880
<v Speaker 1>write about?

0:34:45.080 --> 0:34:48.759
<v Speaker 2>So if what happened to the media of in my

0:34:48.880 --> 0:34:51.799
<v Speaker 2>space anyway? Starting about twenty years ago is you should

0:34:51.880 --> 0:34:55.839
<v Speaker 2>be quote authentic and vulnerable, and you should have meltdowns,

0:34:55.880 --> 0:34:59.840
<v Speaker 2>and you should pick fights, and you should tell really

0:35:00.120 --> 0:35:03.960
<v Speaker 2>simple things and this amazing secret will reveal everything, and

0:35:04.000 --> 0:35:10.560
<v Speaker 2>you should dumb it down. And if you're lucky, when

0:35:10.600 --> 0:35:13.400
<v Speaker 2>you do that, you could sell a whole bunch of

0:35:13.480 --> 0:35:16.560
<v Speaker 2>clicks or books or whatever it is you want to sell.

0:35:17.120 --> 0:35:20.680
<v Speaker 2>But it doesn't last. And instead I said, I'm here

0:35:20.680 --> 0:35:23.160
<v Speaker 2>to write for the people who give me the benefit

0:35:23.200 --> 0:35:25.520
<v Speaker 2>of the doubt. I'm here to write for people who

0:35:25.600 --> 0:35:29.239
<v Speaker 2>trust me to tell them something that they need to hear,

0:35:29.520 --> 0:35:34.400
<v Speaker 2>and then maybe they'll tell their friends. So if those

0:35:34.440 --> 0:35:37.640
<v Speaker 2>people go out and share an idea, that's when I succeed.

0:35:37.960 --> 0:35:42.600
<v Speaker 2>I'm giving ideas to people who benefit from telling the others.

0:35:42.960 --> 0:35:45.920
<v Speaker 2>So my strategy for the Strategy book is how do

0:35:45.960 --> 0:35:49.120
<v Speaker 2>I create the conditions for people to talk about it?

0:35:49.960 --> 0:35:52.239
<v Speaker 2>So in addition to the book, I made the five

0:35:52.280 --> 0:35:55.680
<v Speaker 2>point two million combination card deck, and I made the

0:35:55.680 --> 0:35:59.600
<v Speaker 2>collectible chocolate bar with trading cards in it, and mostly

0:36:00.680 --> 0:36:02.959
<v Speaker 2>I went on one hundred podcasts and I talked about

0:36:03.000 --> 0:36:04.960
<v Speaker 2>it in a way that would help other people talk

0:36:05.000 --> 0:36:08.680
<v Speaker 2>about it. Because I'm not trying to sell a paper

0:36:09.120 --> 0:36:11.080
<v Speaker 2>piece of paper. I'm not even trying to sell a book,

0:36:11.520 --> 0:36:14.839
<v Speaker 2>trying to sell a conversation, because if the people who

0:36:14.840 --> 0:36:18.720
<v Speaker 2>are listening to us today sit down with their colleagues

0:36:18.760 --> 0:36:23.040
<v Speaker 2>and talk about their strategy, I will have accomplished something.

0:36:30.719 --> 0:36:33.759
<v Speaker 1>Let's say you're on a podcast and your goal is

0:36:33.800 --> 0:36:36.879
<v Speaker 1>to get someone to start a conversation. You just say

0:36:36.920 --> 0:36:39.160
<v Speaker 1>I am who I am, and that's going to be natural.

0:36:39.680 --> 0:36:42.200
<v Speaker 1>Or do you say there are certain things I want

0:36:42.239 --> 0:36:44.480
<v Speaker 1>to say and how I want to say them.

0:36:44.920 --> 0:36:48.200
<v Speaker 2>So what we're trying to do, whenever we make a

0:36:48.320 --> 0:36:52.480
<v Speaker 2>change happen is to create tension. And the tension for

0:36:52.520 --> 0:36:54.560
<v Speaker 2>a teenager with music is, oh, I haven't heard that

0:36:54.920 --> 0:36:56.759
<v Speaker 2>new song. I need to hear it because I'll be

0:36:56.840 --> 0:37:01.680
<v Speaker 2>left behind. The tension for somebody who in their dreams

0:37:01.760 --> 0:37:04.200
<v Speaker 2>was going to go see Taylor Swift is the concert's

0:37:04.239 --> 0:37:05.600
<v Speaker 2>going to sell out. I got to figure out a

0:37:05.640 --> 0:37:08.080
<v Speaker 2>way to get a ticket before they're all gone. Tension

0:37:08.160 --> 0:37:11.760
<v Speaker 2>is very common in things where there's scarcity and time

0:37:11.880 --> 0:37:16.319
<v Speaker 2>is involved. But there's other sorts of tension that come

0:37:16.800 --> 0:37:20.759
<v Speaker 2>even just from the simple dana because the person who

0:37:20.760 --> 0:37:24.520
<v Speaker 2>hears it needs to say Dana or else they're unsettled.

0:37:25.400 --> 0:37:31.880
<v Speaker 2>So what I am doing with my work is opening

0:37:31.920 --> 0:37:34.719
<v Speaker 2>the door for people to see where I'm going. But

0:37:34.800 --> 0:37:39.320
<v Speaker 2>I don't steal the revelation. If I tell them every punchline,

0:37:39.400 --> 0:37:42.560
<v Speaker 2>there's no growth, there's no learning. So instead I can

0:37:42.680 --> 0:37:45.640
<v Speaker 2>lay out this groundwork and they can come to the

0:37:45.680 --> 0:37:49.520
<v Speaker 2>conclusion on their own in their industry that there's something

0:37:49.560 --> 0:37:53.520
<v Speaker 2>they can do next and it makes sense to them.

0:37:53.800 --> 0:37:56.960
<v Speaker 1>Okay, so you have a new book. How far in

0:37:57.080 --> 0:38:00.520
<v Speaker 1>advance of publication did you have the eye be to

0:38:00.640 --> 0:38:01.400
<v Speaker 1>do the book?

0:38:04.360 --> 0:38:04.920
<v Speaker 3>Okay, so.

0:38:06.360 --> 0:38:10.040
<v Speaker 2>Some people, including me, in the old days, if you're

0:38:10.040 --> 0:38:12.239
<v Speaker 2>in the book business, you need a book where you

0:38:12.239 --> 0:38:14.400
<v Speaker 2>don't get paid. So I would wake up in the

0:38:14.440 --> 0:38:17.719
<v Speaker 2>morning and think of book ideas. When I was a

0:38:17.719 --> 0:38:20.160
<v Speaker 2>book packager, I sold one hundred and twenty books a

0:38:20.200 --> 0:38:22.640
<v Speaker 2>book a month for ten years, and in order to

0:38:22.640 --> 0:38:24.120
<v Speaker 2>do that, I had to think of a new book

0:38:24.160 --> 0:38:28.120
<v Speaker 2>every two or three days. That's what I did, and

0:38:28.960 --> 0:38:32.400
<v Speaker 2>I stopped doing that about ten years ago because making

0:38:32.400 --> 0:38:35.920
<v Speaker 2>a book is exhausting and I can get my ideas

0:38:35.920 --> 0:38:38.840
<v Speaker 2>into the world much more efficiently and to more people

0:38:39.280 --> 0:38:42.000
<v Speaker 2>with a blog post. So I only write a book

0:38:42.000 --> 0:38:45.520
<v Speaker 2>when I have no choice, and I have no choice

0:38:45.520 --> 0:38:48.480
<v Speaker 2>because the book made me do it. So what happened

0:38:48.520 --> 0:38:51.680
<v Speaker 2>here is I write every day, no matter what. And

0:38:51.920 --> 0:38:55.960
<v Speaker 2>I started writing about a year ago, but not to

0:38:56.000 --> 0:38:58.359
<v Speaker 2>write a book, just to write down a bunch of

0:38:58.480 --> 0:39:00.520
<v Speaker 2>blog posts that I thought would rhyme with each other.

0:39:01.200 --> 0:39:04.680
<v Speaker 2>And after I had written twenty of them, which took

0:39:04.680 --> 0:39:08.320
<v Speaker 2>about three days, I realized there were all these pieces

0:39:08.320 --> 0:39:11.240
<v Speaker 2>in between that we're missing. So then I had forty

0:39:11.280 --> 0:39:14.160
<v Speaker 2>of them, and I thought, uh, oh, I have a

0:39:14.200 --> 0:39:17.560
<v Speaker 2>problem now because I have a book. And I was

0:39:17.600 --> 0:39:20.560
<v Speaker 2>not in any mood to publish a book because it's,

0:39:20.719 --> 0:39:23.920
<v Speaker 2>as I said, a slog. But it wouldn't let me go.

0:39:24.120 --> 0:39:27.280
<v Speaker 2>So there was a book starting in November. I wrote

0:39:27.480 --> 0:39:30.040
<v Speaker 2>it in not a lot of time, and then I

0:39:30.080 --> 0:39:35.279
<v Speaker 2>rewrote it two or three times. Then the work of

0:39:35.400 --> 0:39:40.120
<v Speaker 2>publishing the book that takes six more months of design

0:39:40.280 --> 0:39:43.719
<v Speaker 2>and discussion and layout, and I do all the typesetting

0:39:43.719 --> 0:39:47.160
<v Speaker 2>and coverge design myself, etc. Recording the audiobook cost me

0:39:47.239 --> 0:39:49.759
<v Speaker 2>my voice for over a month, going to DNT and

0:39:49.800 --> 0:39:52.719
<v Speaker 2>getting scoped. But the book won't let you go.

0:39:54.760 --> 0:39:57.680
<v Speaker 1>Okay, there was an element there I want to drive too,

0:39:58.160 --> 0:40:03.120
<v Speaker 1>which is promotion. You know, the music business, we've been

0:40:03.160 --> 0:40:05.240
<v Speaker 1>through a lot of stuff. In the last twenty five years.

0:40:05.880 --> 0:40:10.040
<v Speaker 1>There was all the issues of leaks. Albums were coming

0:40:10.080 --> 0:40:13.640
<v Speaker 1>out prior to the official release date. Someone in the

0:40:13.680 --> 0:40:18.120
<v Speaker 1>manufacturing plant stole a copy whatever, and everybody was freaked out.

0:40:19.440 --> 0:40:23.000
<v Speaker 1>Now we've actually gone two things have changed. One, it's

0:40:23.000 --> 0:40:26.279
<v Speaker 1>hard to gain notice at all at some level. Would

0:40:26.280 --> 0:40:30.040
<v Speaker 1>be great if you were leaked, okay, And then a

0:40:30.120 --> 0:40:33.879
<v Speaker 1>lot of major artists don't do any advance publicity at all.

0:40:34.600 --> 0:40:38.359
<v Speaker 1>They just put the album out and then things go.

0:40:38.480 --> 0:40:42.120
<v Speaker 1>So what's the status of advanced publicity today?

0:40:42.520 --> 0:40:42.839
<v Speaker 3>All right?

0:40:42.880 --> 0:40:45.920
<v Speaker 2>So Tim O'Reilly famously said your problem is in piracy,

0:40:46.640 --> 0:40:51.919
<v Speaker 2>your problem is obscurity, And speaking just for me, if

0:40:51.960 --> 0:40:54.200
<v Speaker 2>I thought five million people would read my book tomorrow,

0:40:54.239 --> 0:40:56.600
<v Speaker 2>if I just uploaded the PDF, I would do it

0:40:56.600 --> 0:41:01.040
<v Speaker 2>in the heartbeat. The hard part now for music but

0:41:01.200 --> 0:41:05.600
<v Speaker 2>always for books, has been getting people to pay attention, right,

0:41:06.640 --> 0:41:12.360
<v Speaker 2>And attention is scarce. You don't get any more of it.

0:41:12.360 --> 0:41:14.399
<v Speaker 2>It gets rebuilt every day, but you don't get any

0:41:14.400 --> 0:41:18.520
<v Speaker 2>more of it. So what's the point of advance publicity? Well,

0:41:18.520 --> 0:41:22.600
<v Speaker 2>if there's retail, if there's strawberries and Tower and three

0:41:22.600 --> 0:41:24.560
<v Speaker 2>other record stores that are going to kick you out

0:41:24.600 --> 0:41:26.319
<v Speaker 2>of the shelves if you don't sell in the first

0:41:26.320 --> 0:41:29.319
<v Speaker 2>four weeks. You need to prime the pump. So the

0:41:29.320 --> 0:41:33.120
<v Speaker 2>first couple of days are really hot, but Spotify doesn't

0:41:33.160 --> 0:41:38.560
<v Speaker 2>kick people out, so there's no upside from a streaming

0:41:38.600 --> 0:41:43.000
<v Speaker 2>point of view. To advance publicity, what you need to

0:41:43.040 --> 0:41:47.600
<v Speaker 2>do is become popular enough that the people who want

0:41:47.640 --> 0:41:49.520
<v Speaker 2>to only listen to things that are popular are going

0:41:49.560 --> 0:41:52.920
<v Speaker 2>to listen to you because you're popular. And that happens

0:41:52.920 --> 0:41:58.960
<v Speaker 2>when you concentrate the promotion geographically and over time, because

0:41:58.960 --> 0:42:03.160
<v Speaker 2>that burst of focus causes people to say, you got

0:42:03.160 --> 0:42:05.560
<v Speaker 2>to go do this, and you know, we see this

0:42:06.120 --> 0:42:09.640
<v Speaker 2>with you know, about half of the time you review

0:42:09.719 --> 0:42:15.480
<v Speaker 2>something that's on streaming TV in your letter, it's because

0:42:15.520 --> 0:42:18.480
<v Speaker 2>it's sort of new and you're noticing it because other

0:42:18.520 --> 0:42:23.000
<v Speaker 2>people are noticing it. And sometimes you find a gem

0:42:23.280 --> 0:42:27.000
<v Speaker 2>that we missed a year ago. That's a whole different story.

0:42:27.040 --> 0:42:32.040
<v Speaker 2>But the story of launch and promotion is the author's

0:42:32.080 --> 0:42:34.120
<v Speaker 2>job is to sell the first ten thousand copies of

0:42:34.120 --> 0:42:36.680
<v Speaker 2>the book, and then after that, it's the book's job

0:42:36.719 --> 0:42:37.399
<v Speaker 2>to sell the rest.

0:42:40.640 --> 0:42:47.080
<v Speaker 1>Okay, So in your particular case, the six months of

0:42:47.160 --> 0:42:50.799
<v Speaker 1>getting it all together to publication date. You have these

0:42:50.840 --> 0:42:54.920
<v Speaker 1>external products you're using as hype. How do you feel

0:42:54.960 --> 0:42:57.200
<v Speaker 1>you're going to sell the first ten thousand copies?

0:42:58.120 --> 0:43:02.320
<v Speaker 2>So I recorded eighty guest podcasts over the course of

0:43:02.400 --> 0:43:04.919
<v Speaker 2>two and a half months, and my deal with each

0:43:04.960 --> 0:43:07.600
<v Speaker 2>person who is super great to work with was you

0:43:07.640 --> 0:43:10.560
<v Speaker 2>got to hold it in Simbargo to October twenty second.

0:43:11.320 --> 0:43:15.840
<v Speaker 2>So on one day I was on eighty podcasts, which

0:43:16.960 --> 0:43:19.839
<v Speaker 2>means that you know, through the math, let's say eight

0:43:19.840 --> 0:43:22.840
<v Speaker 2>million people give or take two million people somewhere in

0:43:22.880 --> 0:43:28.520
<v Speaker 2>there heard me talking about this idea, and that was

0:43:28.560 --> 0:43:33.719
<v Speaker 2>my biggest lift to make it happen. And then the

0:43:33.800 --> 0:43:37.040
<v Speaker 2>second part is I'm very lucky a million people read

0:43:37.040 --> 0:43:39.440
<v Speaker 2>my blog in one form or another who give me

0:43:39.520 --> 0:43:41.839
<v Speaker 2>the benefit of the doubt. And I said to them,

0:43:41.880 --> 0:43:47.000
<v Speaker 2>with no advance hustle, today's the day. What I did

0:43:47.360 --> 0:43:51.720
<v Speaker 2>a month before that was I said to the true fans,

0:43:51.760 --> 0:43:55.839
<v Speaker 2>the people who are the super fans. I've got one thousand,

0:43:56.800 --> 0:44:00.239
<v Speaker 2>seven packs, seven copies of the book, a chocolate bar,

0:44:00.560 --> 0:44:03.960
<v Speaker 2>the strategy deck, and my online course together worth eight

0:44:04.080 --> 0:44:07.080
<v Speaker 2>hundred bucks. I'm selling it for one hundred and twenty

0:44:07.120 --> 0:44:11.239
<v Speaker 2>five dollars. And so the people who for whom that's

0:44:11.280 --> 0:44:15.239
<v Speaker 2>an instant yes, said great. And that means that we

0:44:15.280 --> 0:44:18.879
<v Speaker 2>sold out in thirty six hours, and that's a little

0:44:18.920 --> 0:44:21.040
<v Speaker 2>bit like what Ryano can pull off with a grateful

0:44:21.040 --> 0:44:24.680
<v Speaker 2>Dead record. And so I sold seven thousand books before

0:44:24.680 --> 0:44:27.959
<v Speaker 2>the book came out, So getting to ten thousand wasn't

0:44:27.960 --> 0:44:28.800
<v Speaker 2>that much of a lift.

0:44:31.160 --> 0:44:33.759
<v Speaker 1>So how long do you expect the life of the

0:44:33.760 --> 0:44:36.560
<v Speaker 1>book to be well?

0:44:36.600 --> 0:44:38.520
<v Speaker 2>I was at a conference on Friday and someone walked

0:44:38.560 --> 0:44:41.239
<v Speaker 2>up to me and said, Purple Cow changed my life.

0:44:41.320 --> 0:44:43.759
<v Speaker 2>And I wrote that book twenty three years twenty five

0:44:43.800 --> 0:44:47.080
<v Speaker 2>years ago. So that's my goal. My goal is to

0:44:47.120 --> 0:44:49.960
<v Speaker 2>write a book that twenty five years from now isn't

0:44:50.320 --> 0:44:54.600
<v Speaker 2>some weird dated artifact, but is in fact worth looking

0:44:54.640 --> 0:44:55.560
<v Speaker 2>at even then.

0:44:56.360 --> 0:44:59.160
<v Speaker 1>So you have all this great insight you did go

0:44:59.239 --> 0:45:03.480
<v Speaker 1>to Stanford Business School, were you taught or is this

0:45:03.600 --> 0:45:05.680
<v Speaker 1>all insight you gained individually?

0:45:08.000 --> 0:45:11.960
<v Speaker 2>I taught none of this at Stanford Business School. Stanford

0:45:12.000 --> 0:45:17.480
<v Speaker 2>Business School when I went was an interesting cultural experience

0:45:18.040 --> 0:45:23.320
<v Speaker 2>that was largely devoid of actual content that you could

0:45:23.440 --> 0:45:25.960
<v Speaker 2>that would take more than six hours to read in

0:45:26.000 --> 0:45:29.040
<v Speaker 2>a book. If someone had just like condensed everything they

0:45:29.080 --> 0:45:31.359
<v Speaker 2>taught us. It would only take six hours to read.

0:45:31.960 --> 0:45:36.480
<v Speaker 2>But the cultural experience of being in a group of

0:45:36.520 --> 0:45:40.160
<v Speaker 2>people who were expected to go into the world and

0:45:40.200 --> 0:45:43.680
<v Speaker 2>do a certain sort of thing really made a difference

0:45:43.880 --> 0:45:47.200
<v Speaker 2>when it came to feeling like an imposter, made a

0:45:47.200 --> 0:45:51.279
<v Speaker 2>difference of changing the perspective you would have. And then

0:45:51.440 --> 0:45:55.640
<v Speaker 2>the rest of it was being fortunate enough to be

0:45:55.719 --> 0:45:58.319
<v Speaker 2>in the room where I didn't get thrown out when

0:45:58.320 --> 0:46:01.080
<v Speaker 2>I said stupid things, and I could figure out what

0:46:01.120 --> 0:46:04.520
<v Speaker 2>a stupid thing was and not do it again. And

0:46:05.719 --> 0:46:09.239
<v Speaker 2>that cycle doing it as fast as possible is the

0:46:09.280 --> 0:46:11.880
<v Speaker 2>best life advice I have when young people ask me

0:46:12.040 --> 0:46:14.280
<v Speaker 2>what they should do. If you want to learn marketing,

0:46:14.320 --> 0:46:16.520
<v Speaker 2>do marketing. If you want to build a career, find

0:46:16.560 --> 0:46:19.640
<v Speaker 2>the fastest growing company you can because in a fast

0:46:19.680 --> 0:46:21.480
<v Speaker 2>growing company there's always.

0:46:21.239 --> 0:46:22.040
<v Speaker 3>A new job to do.

0:46:22.080 --> 0:46:25.360
<v Speaker 2>You're not taking away responsibility from someone else, it's just

0:46:25.400 --> 0:46:27.640
<v Speaker 2>sitting there. Someone needs to grab it.

0:46:30.000 --> 0:46:34.320
<v Speaker 1>So, to my knowledge, which is not extensive, Stanford Business

0:46:34.360 --> 0:46:36.480
<v Speaker 1>School is a little bit different from the others in

0:46:36.520 --> 0:46:40.840
<v Speaker 1>that it focuses on small groups. A to what degree

0:46:40.920 --> 0:46:44.120
<v Speaker 1>is it different from other environments and was it really

0:46:44.160 --> 0:46:46.880
<v Speaker 1>the hothouse of being at Stanford because you hear a

0:46:46.920 --> 0:46:50.480
<v Speaker 1>lot about Harvard Business School and it's people say it's

0:46:50.520 --> 0:46:54.120
<v Speaker 1>primarily about the relationships they make more than what's in

0:46:54.160 --> 0:46:56.600
<v Speaker 1>the school. So what was your experience.

0:46:57.560 --> 0:46:59.680
<v Speaker 2>Well, the best man of my wedding in my old

0:46:59.680 --> 0:47:02.000
<v Speaker 2>business partner went to Harvard when I went to Stanford,

0:47:02.160 --> 0:47:04.600
<v Speaker 2>so I had sort of a close view of this.

0:47:05.600 --> 0:47:08.560
<v Speaker 2>The indoctrination at Harvard. Again, we're telling you a long

0:47:08.600 --> 0:47:12.480
<v Speaker 2>time ago, but the indoctrination at Harvard is very intentional,

0:47:13.360 --> 0:47:17.600
<v Speaker 2>and it's not just the relationships with your section. So

0:47:18.000 --> 0:47:20.239
<v Speaker 2>here's one way to think about it. The first day

0:47:20.280 --> 0:47:24.760
<v Speaker 2>of the first class at Harvard, you elect your alumni representative.

0:47:26.360 --> 0:47:29.840
<v Speaker 2>That's profound. I love that because they're sending this message

0:47:29.840 --> 0:47:32.120
<v Speaker 2>that says you're going to sit through this for two years.

0:47:32.120 --> 0:47:34.000
<v Speaker 2>But the reason we're here is because you're going to

0:47:34.040 --> 0:47:37.920
<v Speaker 2>be alumni. But it doesn't change so much from year

0:47:37.920 --> 0:47:40.040
<v Speaker 2>to year, so it doesn't matter if you're Harvard eighty

0:47:40.120 --> 0:47:43.480
<v Speaker 2>six or Harvard ninety four. Harvard people are Harvard people.

0:47:43.520 --> 0:47:45.759
<v Speaker 2>We know they're going to behave in meetings, we know

0:47:46.160 --> 0:47:49.439
<v Speaker 2>they're going to you know, brutalize their way through when

0:47:50.320 --> 0:47:53.600
<v Speaker 2>it needs an unlimited amount of time or whatever. So

0:47:53.800 --> 0:47:55.960
<v Speaker 2>they hire each other and they respect each other, and

0:47:56.000 --> 0:47:59.960
<v Speaker 2>there's a status thing going on. Stanford when I was there,

0:48:01.560 --> 0:48:07.000
<v Speaker 2>felt like it was much more focused on helping people

0:48:08.080 --> 0:48:16.320
<v Speaker 2>see themselves as independent, thoughtful, consulting type professionals who could

0:48:16.440 --> 0:48:19.279
<v Speaker 2>you know, like Samurai, who would walk into a place

0:48:19.320 --> 0:48:21.399
<v Speaker 2>and be the smartest person in the room, even though

0:48:21.440 --> 0:48:23.920
<v Speaker 2>we weren't the smartest people in the room. It was

0:48:24.080 --> 0:48:30.480
<v Speaker 2>just this understanding that being smart was sufficient, And I

0:48:30.480 --> 0:48:34.719
<v Speaker 2>think that's wrong. And my gut is that they have

0:48:34.840 --> 0:48:38.680
<v Speaker 2>changed it a lot since then, because what most business

0:48:38.760 --> 0:48:42.799
<v Speaker 2>is about, especially the music businesses, in that meeting, in

0:48:42.920 --> 0:48:46.680
<v Speaker 2>that interaction, are you engaging with someone else to create

0:48:46.680 --> 0:48:50.720
<v Speaker 2>the conditions for something new to happen. This isn't about

0:48:50.840 --> 0:48:54.960
<v Speaker 2>using spreadsheets to squeak out an extra nickel. It's about

0:48:55.320 --> 0:48:57.759
<v Speaker 2>finding a window that's worth opening and a door that's

0:48:57.760 --> 0:49:01.600
<v Speaker 2>worth walking through. And that is a practice, just like

0:49:01.640 --> 0:49:03.640
<v Speaker 2>writing a book is a practice and writing a song

0:49:03.719 --> 0:49:05.880
<v Speaker 2>is a practice. But we don't do a very good

0:49:05.960 --> 0:49:07.160
<v Speaker 2>job of teaching it to people.

0:49:09.000 --> 0:49:12.279
<v Speaker 1>Let's stay you mentioned consulting, not in other way. I'm

0:49:12.320 --> 0:49:15.600
<v Speaker 1>going to bring it up. There's a huge backlash against

0:49:15.719 --> 0:49:20.239
<v Speaker 1>McKinsey and other consultants. What's your view of consulting.

0:49:21.400 --> 0:49:21.640
<v Speaker 3>I have.

0:49:22.880 --> 0:49:25.719
<v Speaker 2>I don't think we've heaped nearly enough. Shame on the

0:49:25.800 --> 0:49:29.200
<v Speaker 2>people who said I'm just doing my job but also

0:49:29.320 --> 0:49:31.120
<v Speaker 2>busy figure out how to get more people to smoke

0:49:31.160 --> 0:49:36.040
<v Speaker 2>a jewel or figure out how to get some monopoly

0:49:36.080 --> 0:49:38.360
<v Speaker 2>to extract more money from people who don't have money.

0:49:38.840 --> 0:49:42.880
<v Speaker 2>You're responsible if you're doing the work, your fingerprints are

0:49:42.920 --> 0:49:48.360
<v Speaker 2>on it. You should own what you do. And consulting

0:49:48.520 --> 0:49:54.719
<v Speaker 2>in general is magical when someone from the outside can

0:49:54.760 --> 0:49:56.960
<v Speaker 2>see a problem that you can't see because you're too

0:49:56.960 --> 0:50:00.000
<v Speaker 2>close to it. But that's not what most consultants get

0:50:00.120 --> 0:50:04.240
<v Speaker 2>to do because the hardest part of consulting is getting clients.

0:50:04.760 --> 0:50:09.680
<v Speaker 2>And getting and keeping clients requires an enormous amount of

0:50:10.640 --> 0:50:15.040
<v Speaker 2>understanding the status quo and making sure your right answer

0:50:15.160 --> 0:50:19.720
<v Speaker 2>is acceptable. And it's not really about the right answer,

0:50:20.360 --> 0:50:23.560
<v Speaker 2>because we're not doing engineering here, we're doing people.

0:50:31.360 --> 0:50:35.040
<v Speaker 1>I know someone who's CFO of a large company worked

0:50:35.040 --> 0:50:41.279
<v Speaker 1>for one of these name brand consulting firms, McKenzie. I say,

0:50:41.320 --> 0:50:43.440
<v Speaker 1>why'd you leave? Because I didn't believe in the model,

0:50:44.000 --> 0:50:47.960
<v Speaker 1>Because they're taking fresh graduates. We're going out there. We

0:50:48.000 --> 0:50:50.640
<v Speaker 1>don't know what we're talking about, right.

0:50:51.400 --> 0:50:54.680
<v Speaker 2>So you know, when you look at a place like

0:50:54.760 --> 0:50:57.879
<v Speaker 2>McKinzie or Arthur Anderson that has so many people there,

0:50:58.640 --> 0:51:02.400
<v Speaker 2>clearly half of them are below average no matter what

0:51:02.440 --> 0:51:05.799
<v Speaker 2>scale you want to look at. But mostly the problems

0:51:06.280 --> 0:51:12.319
<v Speaker 2>aren't that hard. Mostly the problems simply require verbalization. When

0:51:12.680 --> 0:51:16.719
<v Speaker 2>you hire McKenzie, you're often hiring them so you can

0:51:16.760 --> 0:51:18.520
<v Speaker 2>go to the board of directors and say, I'm doing

0:51:18.600 --> 0:51:22.759
<v Speaker 2>this because McKenzie said we should, and that's what you

0:51:22.800 --> 0:51:25.080
<v Speaker 2>paid for, not that they came up with some sort

0:51:25.120 --> 0:51:27.120
<v Speaker 2>of brilliant insight that you couldn't come up with on

0:51:27.160 --> 0:51:32.919
<v Speaker 2>your own. It's very cool when you see the rare

0:51:33.040 --> 0:51:36.880
<v Speaker 2>moment when a consultant comes up with a brilliant insight. So,

0:51:36.960 --> 0:51:41.680
<v Speaker 2>for example, in the eighties, seventies and eighties, digital watches

0:51:41.719 --> 0:51:45.000
<v Speaker 2>started to show up. And there's something in the production

0:51:45.080 --> 0:51:49.640
<v Speaker 2>of semiconductors called experience curve, which is the ten thousandth

0:51:50.040 --> 0:51:53.040
<v Speaker 2>chip you make is way way, way, way way cheaper

0:51:53.120 --> 0:51:57.040
<v Speaker 2>than the first one, and all these people who were

0:51:57.040 --> 0:51:59.760
<v Speaker 2>making digital watches were pricing them fairly at three hundred

0:51:59.760 --> 0:52:02.799
<v Speaker 2>dollars because it was costing them three hundred and two

0:52:02.840 --> 0:52:06.279
<v Speaker 2>hundred dollars to make them. And this consultant figured out

0:52:06.320 --> 0:52:08.880
<v Speaker 2>and explained to Texas Instruments, if they made a lot

0:52:09.040 --> 0:52:12.160
<v Speaker 2>of watches, they could make them for four dollars each.

0:52:13.320 --> 0:52:17.000
<v Speaker 2>So Texas Instrument lowered the price of digital watches to

0:52:17.120 --> 0:52:20.400
<v Speaker 2>way below what it costs to make, so that they

0:52:20.400 --> 0:52:23.600
<v Speaker 2>would sell a lot of them, and thus their costs

0:52:23.600 --> 0:52:25.360
<v Speaker 2>would go down and no one would be able to

0:52:25.400 --> 0:52:28.440
<v Speaker 2>catch up for years and years. And that's exactly what happened.

0:52:29.200 --> 0:52:33.960
<v Speaker 2>That's that's a consultant bit of brilliancy. But that's not

0:52:34.120 --> 0:52:35.919
<v Speaker 2>usually what consultants are busy doing.

0:52:37.200 --> 0:52:40.600
<v Speaker 1>It's interesting you speak of watches because in the watch world,

0:52:41.239 --> 0:52:47.680
<v Speaker 1>especially with Rolex, which is a major brand, they're constricting availability. Yep.

0:52:48.840 --> 0:52:53.520
<v Speaker 1>And you believe that's a strategy just about image or

0:52:53.600 --> 0:52:55.640
<v Speaker 1>what do you think the thinking behind that is.

0:52:55.960 --> 0:52:58.600
<v Speaker 2>I love this topic, Bob, It's so much fun to

0:52:58.600 --> 0:53:01.960
<v Speaker 2>talk to you. Okay, so we should talk about luxury goods.

0:53:02.719 --> 0:53:08.319
<v Speaker 2>Luxury goods aren't better except at one thing, right, Like

0:53:08.360 --> 0:53:12.240
<v Speaker 2>a Rolex watch does not tell more accurate time then.

0:53:12.280 --> 0:53:15.040
<v Speaker 1>It tells, it tells less accurate times I happened to

0:53:15.080 --> 0:53:15.680
<v Speaker 1>have one.

0:53:15.719 --> 0:53:20.040
<v Speaker 2>Exactly than a digital watch. So what exactly do you buy?

0:53:20.080 --> 0:53:24.120
<v Speaker 2>When you buy a burken bag or something from Louis

0:53:24.160 --> 0:53:27.800
<v Speaker 2>Vuittont or go out for dinner for four hundred dollars,

0:53:28.040 --> 0:53:32.040
<v Speaker 2>You are not buying the quality by most definitions of

0:53:32.080 --> 0:53:36.000
<v Speaker 2>what you purchased. What you're buying is something where the

0:53:36.040 --> 0:53:39.239
<v Speaker 2>motto is I paid a lot and I didn't get

0:53:39.239 --> 0:53:44.600
<v Speaker 2>what I paid for. That the intentional waste of a

0:53:44.680 --> 0:53:48.960
<v Speaker 2>verbulin of a what's his name verbulin good? Is the

0:53:49.000 --> 0:53:53.160
<v Speaker 2>price is the quality. The price is the point. The

0:53:53.239 --> 0:53:57.000
<v Speaker 2>scarcity is the point that if they made as many

0:53:57.120 --> 0:54:01.200
<v Speaker 2>Rolexes as they could, it wouldn't be a luxury good anymore.

0:54:02.000 --> 0:54:05.799
<v Speaker 2>That what makes it something that's worth owning is that

0:54:05.840 --> 0:54:08.280
<v Speaker 2>you can afford to have paid more than you should

0:54:08.360 --> 0:54:11.760
<v Speaker 2>have for the thing that does what's on your wrist.

0:54:12.840 --> 0:54:16.719
<v Speaker 2>And luxury goods, as we see more and more income inequality,

0:54:17.000 --> 0:54:21.400
<v Speaker 2>have become ever more profitable because the makers of luxury

0:54:21.400 --> 0:54:23.640
<v Speaker 2>goods have figured out that every time they raised the

0:54:23.680 --> 0:54:27.359
<v Speaker 2>price and lower the availability, profits go up, and so

0:54:27.440 --> 0:54:28.000
<v Speaker 2>does demand.

0:54:30.280 --> 0:54:33.040
<v Speaker 1>Okay, let's go a little bit deeper, because this is

0:54:33.080 --> 0:54:37.000
<v Speaker 1>happening right now, some of these luxury goods. Burbery, which

0:54:37.080 --> 0:54:41.239
<v Speaker 1>is not a super top, they started appealing to the

0:54:41.280 --> 0:54:45.600
<v Speaker 1>more casual customer. I won't say things are cheap, but

0:54:45.719 --> 0:54:50.239
<v Speaker 1>they're not out of reach yep. And they have now been.

0:54:50.400 --> 0:54:55.440
<v Speaker 1>The brand is on a downhill slide. Okay, So what

0:54:55.480 --> 0:54:59.319
<v Speaker 1>would your strategy be for a luxury good I'll give

0:54:59.360 --> 0:55:04.400
<v Speaker 1>you one more exact Mercedes Benz. Mercedes Benz decided to

0:55:04.640 --> 0:55:10.400
<v Speaker 1>decrease overall production and then move it to more expensive cars.

0:55:11.160 --> 0:55:13.840
<v Speaker 1>So what do you think about the varying philosophies on

0:55:13.880 --> 0:55:14.480
<v Speaker 1>each side of that.

0:55:14.920 --> 0:55:18.280
<v Speaker 2>Okay, So, once you're a public company, the stock market,

0:55:18.320 --> 0:55:20.960
<v Speaker 2>which is an idiot, wants you to make as much

0:55:21.000 --> 0:55:23.760
<v Speaker 2>money as you can right now. So if we think

0:55:23.880 --> 0:55:30.960
<v Speaker 2>about outlet malls, Burberry, but particularly Ralph Lauren, discovered that

0:55:31.000 --> 0:55:35.799
<v Speaker 2>they could make different products in a different factory. Call

0:55:35.920 --> 0:55:39.920
<v Speaker 2>them outlet mall direct to consumer seconds or whatever. But

0:55:39.960 --> 0:55:42.319
<v Speaker 2>they're not seconds. It's not like they went and they

0:55:42.320 --> 0:55:44.879
<v Speaker 2>got the seven thousand dollars cashmere thing and they found

0:55:44.880 --> 0:55:46.600
<v Speaker 2>a little error in it and they're selling it for

0:55:46.640 --> 0:55:48.880
<v Speaker 2>seventy bucks. It's a totally different sweater made in a

0:55:48.920 --> 0:55:52.960
<v Speaker 2>totally different factory. The last time I checked, half of

0:55:53.040 --> 0:55:57.560
<v Speaker 2>Ralph Lauren's profits came from outlet malls, from stores they

0:55:57.560 --> 0:55:58.600
<v Speaker 2>owned in an outlet mall.

0:55:59.200 --> 0:56:01.439
<v Speaker 3>So it's a one way road.

0:56:01.719 --> 0:56:03.719
<v Speaker 2>You start down that road, you make a lot of

0:56:03.719 --> 0:56:07.320
<v Speaker 2>money for a while, but it's almost impossible to reclaim

0:56:07.560 --> 0:56:12.439
<v Speaker 2>the super exclusivity thing. So Burberry's has been dancing back

0:56:12.480 --> 0:56:15.480
<v Speaker 2>and forth with this, trying to have it both ways.

0:56:15.600 --> 0:56:18.479
<v Speaker 2>Very very hard to do. So when you think about

0:56:18.520 --> 0:56:23.080
<v Speaker 2>the car business, car business gets even more complicated because,

0:56:23.520 --> 0:56:26.160
<v Speaker 2>unlike a handbag which you can leave in your closet,

0:56:26.680 --> 0:56:31.640
<v Speaker 2>cars you're gonna drive around and cars you're gonna drive

0:56:31.640 --> 0:56:36.560
<v Speaker 2>around for a while, and the narrative of the person

0:56:36.600 --> 0:56:40.319
<v Speaker 2>who's buying the car if it's not the Maybach, if

0:56:40.320 --> 0:56:43.600
<v Speaker 2>it's not the most expensive one, is much more complicated.

0:56:44.080 --> 0:56:46.000
<v Speaker 2>So Mercedes is one of the biggest car companies in

0:56:46.000 --> 0:56:48.680
<v Speaker 2>the world. It's really hard for them to make that

0:56:49.160 --> 0:56:53.440
<v Speaker 2>an exclusive luxury brand. It's also really hard for them

0:56:53.440 --> 0:56:57.440
<v Speaker 2>to compete with Toyota. So there's somewhere in between, and

0:56:57.760 --> 0:57:01.240
<v Speaker 2>there's always going to be this painful churn for people

0:57:01.239 --> 0:57:05.080
<v Speaker 2>in that industry because they can't change the way Diane

0:57:05.120 --> 0:57:08.120
<v Speaker 2>von Furstenberg Kay, Diane, you come out with a new

0:57:08.680 --> 0:57:12.160
<v Speaker 2>line in six weeks for a small group of people.

0:57:12.960 --> 0:57:15.080
<v Speaker 2>It takes six years for Mercedes to do that.

0:57:17.440 --> 0:57:22.360
<v Speaker 1>Okay, switching back a gear. You're from a similar vintage.

0:57:22.400 --> 0:57:24.720
<v Speaker 1>I'm a little older than you. But when I went

0:57:24.760 --> 0:57:28.160
<v Speaker 1>to public high school, there were uh, there were the

0:57:28.280 --> 0:57:31.320
<v Speaker 1>art kids. Everybody was middle class. If you were rich,

0:57:31.360 --> 0:57:34.760
<v Speaker 1>you drove a Cadillac. No one knew what a billionaire was,

0:57:35.880 --> 0:57:38.960
<v Speaker 1>and no one ever wanted their kid to be an artist.

0:57:39.640 --> 0:57:43.479
<v Speaker 1>But some people that's you know, the path they went down.

0:57:44.400 --> 0:57:48.240
<v Speaker 1>So today life is much harder financially, just period. I

0:57:48.280 --> 0:57:50.640
<v Speaker 1>just remember this comes up with by physical therapist all

0:57:50.680 --> 0:57:52.919
<v Speaker 1>the time. You know, you could live I'm seventy five

0:57:52.960 --> 0:57:55.320
<v Speaker 1>or one hundred dollars a week, even if you adjust

0:57:55.320 --> 0:58:00.480
<v Speaker 1>for inflation. You can't do that today. The scions of

0:58:00.520 --> 0:58:04.320
<v Speaker 1>the middle and upper middle class. What people don't realize

0:58:04.400 --> 0:58:08.280
<v Speaker 1>is people of that vintage young teenagers. They know the

0:58:08.320 --> 0:58:11.520
<v Speaker 1>score better than anybody, and they don't want to grow

0:58:11.600 --> 0:58:14.479
<v Speaker 1>up and be poor. They don't want to take the risk.

0:58:15.760 --> 0:58:20.720
<v Speaker 1>So a lot of these more risky endeavors, certainly artistically,

0:58:21.880 --> 0:58:26.480
<v Speaker 1>it is the lower classes that enter these fields. Let

0:58:26.480 --> 0:58:28.440
<v Speaker 1>me let me go a little sideways to make the

0:58:28.480 --> 0:58:32.640
<v Speaker 1>point even further. When Survivor blew up, the people whod

0:58:32.800 --> 0:58:36.840
<v Speaker 1>Survivor believed that they were now stars. That did not

0:58:36.880 --> 0:58:38.920
<v Speaker 1>turn out to be the case, but they believed it.

0:58:39.280 --> 0:58:42.440
<v Speaker 1>When we hit Jersey Shore, people say I'm doing this

0:58:42.480 --> 0:58:45.400
<v Speaker 1>as a lark, that I'm going back to Poughkeepsie. There

0:58:45.480 --> 0:58:49.480
<v Speaker 1>is no future here. So when you have the lower

0:58:49.520 --> 0:58:54.120
<v Speaker 1>classes involved, there's a different ethos. I'll do whatever you

0:58:54.320 --> 0:58:58.160
<v Speaker 1>tell me to because this is just a lark, as

0:58:58.200 --> 0:59:01.120
<v Speaker 1>opposed to the Jefferson airplane or the middle class artists

0:59:01.120 --> 0:59:04.040
<v Speaker 1>of the sixties seven said, I don't want to do that.

0:59:04.040 --> 0:59:08.400
<v Speaker 1>That doesn't feel good. So to what degreed does income, inequality,

0:59:08.520 --> 0:59:12.200
<v Speaker 1>wealth disparity sit over all these creative arts and other

0:59:12.240 --> 0:59:13.600
<v Speaker 1>elements of our society.

0:59:15.440 --> 0:59:20.720
<v Speaker 2>Wow, there are lots of ways into this, and I

0:59:20.720 --> 0:59:26.480
<v Speaker 2>don't think there's a definitive answer. I think we can

0:59:26.560 --> 0:59:29.720
<v Speaker 2>begin with the fact that for a very very long time,

0:59:30.320 --> 0:59:36.560
<v Speaker 2>the only people who were professional artists were people of wealth,

0:59:37.920 --> 0:59:40.680
<v Speaker 2>and they either had a relative who was wealthy or

0:59:40.720 --> 0:59:45.120
<v Speaker 2>they were wealthy themselves. And you know, you got the

0:59:45.200 --> 0:59:49.400
<v Speaker 2>Jane Austen, that whole thing. You're not finding someone who

0:59:50.800 --> 0:59:55.520
<v Speaker 2>is in a small village making music with any expectation

0:59:55.680 --> 0:59:58.040
<v Speaker 2>that there's going to be an industry.

0:59:57.520 --> 0:59:58.960
<v Speaker 3>That's going to propel them forward.

1:00:00.080 --> 1:00:03.160
<v Speaker 2>We get to this zone, the zone when the phrase

1:00:03.200 --> 1:00:07.200
<v Speaker 2>writer's block was invented. Writer's block is a made up malady,

1:00:08.120 --> 1:00:12.480
<v Speaker 2>and it started shortly before Ernest Hemingway was named by

1:00:12.560 --> 1:00:19.040
<v Speaker 2>Percy Shelley, Mary Shelley's partner brother husband.

1:00:18.600 --> 1:00:20.640
<v Speaker 1>One or the other, you're out of my league, all right?

1:00:20.800 --> 1:00:27.880
<v Speaker 2>Anyway, Writer's block is an affliction of middle class kind

1:00:28.000 --> 1:00:32.240
<v Speaker 2>of creatives who don't want to fail on their way up. So, yes,

1:00:32.280 --> 1:00:35.520
<v Speaker 2>you're touching on something important here. Now we get to

1:00:35.600 --> 1:00:38.680
<v Speaker 2>the current day, but I think what you're leaving out

1:00:38.720 --> 1:00:46.040
<v Speaker 2>of it is this golden age of artistic riches that

1:00:46.240 --> 1:00:50.360
<v Speaker 2>came from the scarcity from the gatekeeper. It's going away

1:00:51.440 --> 1:00:54.840
<v Speaker 2>that you can win TikTok, you can win YouTube and

1:00:54.880 --> 1:00:58.160
<v Speaker 2>get a check. But it's not an industry the way

1:00:58.200 --> 1:01:00.920
<v Speaker 2>it was when John Hammond would pick you. It's on

1:01:00.960 --> 1:01:04.440
<v Speaker 2>an industry the way it was when you know, we

1:01:04.680 --> 1:01:07.160
<v Speaker 2>listened to who was going to be the next hit.

1:01:08.600 --> 1:01:12.000
<v Speaker 2>So with that said, I don't think we're going to

1:01:12.120 --> 1:01:15.200
<v Speaker 2>end up with a lot of people who are fifteen

1:01:15.520 --> 1:01:18.920
<v Speaker 2>years old today growing up saying I'm going to be

1:01:19.040 --> 1:01:22.280
<v Speaker 2>the next Van Morrison, because I think they are smart

1:01:22.400 --> 1:01:25.720
<v Speaker 2>enough to know that there might not be that path

1:01:26.480 --> 1:01:29.680
<v Speaker 2>that they shouldn't, you know, get on a bus, go

1:01:29.720 --> 1:01:32.440
<v Speaker 2>to LA and hope to get discovered at a drug

1:01:32.440 --> 1:01:37.920
<v Speaker 2>store because that's not you know, starmaking machinery isn't there anymore,

1:01:38.880 --> 1:01:41.320
<v Speaker 2>and I don't know what happens after that. We're not

1:01:41.360 --> 1:01:43.280
<v Speaker 2>gonna runt of music, We're not going to run out

1:01:43.280 --> 1:01:46.560
<v Speaker 2>of video slash movies, but it feels to me like

1:01:46.600 --> 1:01:48.680
<v Speaker 2>the path is not particularly well lit either.

1:01:51.320 --> 1:01:55.520
<v Speaker 1>There's been consolidation in the record industry. There are three

1:01:55.600 --> 1:02:00.080
<v Speaker 1>major labels who are putting out fewer records in few

1:02:00.080 --> 1:02:05.200
<v Speaker 1>were genres in error before Because we've referenced earlier, they

1:02:05.240 --> 1:02:09.320
<v Speaker 1>can live off their previous product, which is generating capital

1:02:09.360 --> 1:02:13.320
<v Speaker 1>and essentially no investment. But for a mature business like

1:02:13.400 --> 1:02:16.800
<v Speaker 1>that in a changing environment, what might they do.

1:02:21.320 --> 1:02:21.480
<v Speaker 3>Right?

1:02:21.520 --> 1:02:24.560
<v Speaker 2>So this is a key strategy question, which is the

1:02:24.640 --> 1:02:28.040
<v Speaker 2>feeling of entitlement that we get about how do we

1:02:28.400 --> 1:02:32.880
<v Speaker 2>keep this going? But you don't get tomorrow over again?

1:02:33.160 --> 1:02:36.760
<v Speaker 2>So what should they invest in to be able to

1:02:37.520 --> 1:02:40.880
<v Speaker 2>have the careers that they want to have because the

1:02:40.960 --> 1:02:44.280
<v Speaker 2>shareholders are going to ring every penny they can out

1:02:44.280 --> 1:02:48.160
<v Speaker 2>of the assets that are already there. And what I've

1:02:48.280 --> 1:02:51.040
<v Speaker 2>argued is we need to take a deep breath and

1:02:51.080 --> 1:02:54.000
<v Speaker 2>think about what are the assets you own, and what

1:02:54.040 --> 1:02:56.960
<v Speaker 2>are the skills you have, and what is the change

1:02:56.960 --> 1:02:59.840
<v Speaker 2>you seek to make. So Simon and Schuster and Random,

1:02:59.840 --> 1:03:02.800
<v Speaker 2>how if I had stopped by their offices, as I

1:03:02.840 --> 1:03:07.400
<v Speaker 2>often did in nineteen ninety and said ask them those questions?

1:03:07.600 --> 1:03:10.040
<v Speaker 2>They would say things like we organized the world's information.

1:03:11.360 --> 1:03:13.200
<v Speaker 2>And if I said, no, what you do is you

1:03:13.600 --> 1:03:16.600
<v Speaker 2>cut down trees and then hold them hostage, selling them

1:03:16.640 --> 1:03:18.760
<v Speaker 2>to independent bookstores, they would look at me like I

1:03:18.840 --> 1:03:23.120
<v Speaker 2>was clueless. But they could have started Google. It only

1:03:23.120 --> 1:03:27.080
<v Speaker 2>took two people to start Google organizing the world's information. Right,

1:03:27.240 --> 1:03:31.120
<v Speaker 2>Why didn't the book publishers start the search engines? Why

1:03:31.120 --> 1:03:34.480
<v Speaker 2>didn't the book publishers take this great corpus of stuff

1:03:34.480 --> 1:03:37.880
<v Speaker 2>they have and own a big piece of chat GPT

1:03:38.840 --> 1:03:42.960
<v Speaker 2>Because they don't think that way. They're looking backwards, not forwards.

1:03:43.480 --> 1:03:47.920
<v Speaker 2>So these three record labels have a particular competence in

1:03:48.120 --> 1:03:53.880
<v Speaker 2>understanding what youth culture needs. Finding unknown creators and helping

1:03:54.000 --> 1:03:58.320
<v Speaker 2>nurture those unknown creators to bring that idea in some form,

1:03:58.400 --> 1:04:02.920
<v Speaker 2>to use culture to define in the generation. But instead

1:04:02.960 --> 1:04:05.320
<v Speaker 2>of thinking that way, they're just looking for the next

1:04:05.400 --> 1:04:08.480
<v Speaker 2>Taylor Swift, and I think that's a mistake. I don't

1:04:08.520 --> 1:04:11.880
<v Speaker 2>think the middlemen are going to be rewarded the way

1:04:11.880 --> 1:04:16.479
<v Speaker 2>they used to, because creators are discovering that they should

1:04:16.520 --> 1:04:19.920
<v Speaker 2>go to the middlemen after they've become a hit, and

1:04:19.960 --> 1:04:21.560
<v Speaker 2>then they're going to get to keep way more of

1:04:21.600 --> 1:04:22.120
<v Speaker 2>what they have.

1:04:23.600 --> 1:04:27.880
<v Speaker 1>Now. At this particular point in time, three major labels

1:04:27.880 --> 1:04:31.800
<v Speaker 1>are either individually public companies Warner and Universal or Sony

1:04:31.840 --> 1:04:35.760
<v Speaker 1>that's part of a much larger operation. No one there

1:04:35.800 --> 1:04:40.640
<v Speaker 1>has skin in the game, which a you have a

1:04:40.680 --> 1:04:44.720
<v Speaker 1>developing industry over decades, all these independent labels before this

1:04:45.040 --> 1:04:49.600
<v Speaker 1>ultimate growth and consolidation to what degreed does having skin

1:04:49.680 --> 1:04:53.360
<v Speaker 1>in the game affect employees and success.

1:04:55.160 --> 1:04:58.600
<v Speaker 2>I have no idea what share Walter Yetnikov had in

1:04:58.760 --> 1:05:01.240
<v Speaker 2>the game. I don't think that's what he thought of

1:05:01.360 --> 1:05:05.560
<v Speaker 2>on any given day. I don't think that the people

1:05:05.800 --> 1:05:08.080
<v Speaker 2>who I've met and have known in the music business

1:05:08.200 --> 1:05:11.640
<v Speaker 2>were thinking about it strategically. I think they had a job.

1:05:11.680 --> 1:05:15.000
<v Speaker 2>They loved, and I think they had interactions, sometimes bullying people,

1:05:15.240 --> 1:05:18.680
<v Speaker 2>sometimes stealing from people, sometimes taking credit for other people's work,

1:05:19.080 --> 1:05:21.880
<v Speaker 2>that every day was more fun than the next while

1:05:21.920 --> 1:05:25.400
<v Speaker 2>they were doing it. Some of them got really wealthy,

1:05:25.600 --> 1:05:30.560
<v Speaker 2>but I don't think that's what drove them. So what's

1:05:30.640 --> 1:05:34.160
<v Speaker 2>missing for me when you bring in the nbas and

1:05:34.200 --> 1:05:37.080
<v Speaker 2>you say, here are the spreadsheets and here's the balance sheet,

1:05:37.520 --> 1:05:41.680
<v Speaker 2>go make us some more money, is if that's what

1:05:41.720 --> 1:05:44.240
<v Speaker 2>you're if that's what the prize is, that's what they're

1:05:44.240 --> 1:05:48.600
<v Speaker 2>going to go get. And this industry and the stories

1:05:48.640 --> 1:05:50.480
<v Speaker 2>that people share with you on this podcast make it

1:05:50.600 --> 1:05:54.040
<v Speaker 2>very clear this industry at some level was built by

1:05:54.080 --> 1:05:56.600
<v Speaker 2>people who love the game, not by people who want

1:05:56.640 --> 1:05:58.040
<v Speaker 2>to make as much money as possible.

1:06:05.520 --> 1:06:08.760
<v Speaker 1>Switching gears a little bit, we talked about Bill Gates,

1:06:08.760 --> 1:06:12.880
<v Speaker 1>We talked about your experience at Stanford. Right now, there's

1:06:12.920 --> 1:06:16.800
<v Speaker 1>a huge discussion about whether people need to go to

1:06:16.880 --> 1:06:21.040
<v Speaker 1>college or not. If you had a family friend, you know,

1:06:21.560 --> 1:06:24.920
<v Speaker 1>and they had a teenage son, not a schlepper, as

1:06:24.960 --> 1:06:27.320
<v Speaker 1>we put it, someone who could go to a good school,

1:06:27.600 --> 1:06:30.160
<v Speaker 1>but says I have a business idea, I have to

1:06:30.240 --> 1:06:33.520
<v Speaker 1>do this. What would your advice be actually.

1:06:33.160 --> 1:06:35.800
<v Speaker 2>Give advice like this all the time to family friends.

1:06:36.640 --> 1:06:41.240
<v Speaker 2>First of all, you got tricked too by the college

1:06:41.280 --> 1:06:45.120
<v Speaker 2>industrial complex. You said good school. There's a good school

1:06:45.120 --> 1:06:49.800
<v Speaker 2>and a famous school. Famous schools either have football teams

1:06:49.880 --> 1:06:54.520
<v Speaker 2>or endowments, right, And it's very clear, and there's plenty

1:06:54.560 --> 1:06:57.640
<v Speaker 2>of data to show this that people who get into

1:06:57.680 --> 1:07:00.920
<v Speaker 2>Harvard and don't go have just as much happiness and

1:07:00.960 --> 1:07:02.920
<v Speaker 2>wealth in their life as people who get into Harvard

1:07:03.000 --> 1:07:06.640
<v Speaker 2>and do go. That the hard part is having the

1:07:06.680 --> 1:07:09.920
<v Speaker 2>privilege and background and experience to get in, not what

1:07:09.960 --> 1:07:13.800
<v Speaker 2>they did to you in class. Add to that the

1:07:13.840 --> 1:07:17.360
<v Speaker 2>fact that you can take any class you want in

1:07:17.400 --> 1:07:21.000
<v Speaker 2>the world for free online, maybe not at that institution,

1:07:21.160 --> 1:07:25.520
<v Speaker 2>but somewhere. So what these institutions are selling are two things.

1:07:26.360 --> 1:07:31.360
<v Speaker 2>One the badge accreditation proof that you got your ticket stamp,

1:07:31.440 --> 1:07:34.680
<v Speaker 2>because that way you don't have to teach somebody everything

1:07:34.720 --> 1:07:36.320
<v Speaker 2>you know. You can just show them this one piece

1:07:36.320 --> 1:07:39.320
<v Speaker 2>of paper and they make assumptions. And the second thing

1:07:40.000 --> 1:07:44.120
<v Speaker 2>is group cohesion, a group brainwashing to say, people like

1:07:44.240 --> 1:07:47.040
<v Speaker 2>us do things like this, this is the way we

1:07:47.080 --> 1:07:50.280
<v Speaker 2>see the world. And so for a long time, Saturday

1:07:50.400 --> 1:07:53.840
<v Speaker 2>Night Live was written by people who worked on the

1:07:53.840 --> 1:07:58.960
<v Speaker 2>Harvard Lampoon, and you know that's where a lot of

1:07:58.960 --> 1:08:02.520
<v Speaker 2>talk show people have come, etc. Because the indoctrination of

1:08:02.520 --> 1:08:04.600
<v Speaker 2>being a student at the Harvard Lampoon for all those

1:08:04.680 --> 1:08:08.280
<v Speaker 2>years was actually your college experience. So now we've got

1:08:08.280 --> 1:08:11.840
<v Speaker 2>this grand reshuffling, and the question is what would make

1:08:11.920 --> 1:08:15.919
<v Speaker 2>you good at the future. And I don't think it's

1:08:16.600 --> 1:08:18.160
<v Speaker 2>I need to start a business and make a lot

1:08:18.200 --> 1:08:20.599
<v Speaker 2>of money and I can't wait four years because there's

1:08:20.600 --> 1:08:23.400
<v Speaker 2>always going to be a problem worth solving. I think

1:08:23.400 --> 1:08:27.920
<v Speaker 2>it's what experiences are you collecting and where are you

1:08:28.040 --> 1:08:30.920
<v Speaker 2>learning these lessons? And how are you learning them? Do

1:08:30.960 --> 1:08:35.439
<v Speaker 2>you have the discipline to roll that yourself? Are you

1:08:35.520 --> 1:08:38.280
<v Speaker 2>willing to read a book a week every week for

1:08:38.320 --> 1:08:40.920
<v Speaker 2>the next four years instead of going to college? Because

1:08:40.960 --> 1:08:45.960
<v Speaker 2>if you need high school discipline to get smarter, then

1:08:46.040 --> 1:08:48.240
<v Speaker 2>doing it on your own is probably going to be

1:08:48.240 --> 1:08:51.439
<v Speaker 2>a mistake because you're gonna get stuck in that rut.

1:08:52.600 --> 1:08:56.679
<v Speaker 2>And so what I challenge people to do is two things. One,

1:08:57.560 --> 1:09:00.160
<v Speaker 2>I think almost everyone should take a gap year. They

1:09:00.200 --> 1:09:03.280
<v Speaker 2>should take a year to do a hard project with

1:09:03.760 --> 1:09:07.720
<v Speaker 2>some supervision, to grow up and to discover what it's

1:09:07.800 --> 1:09:10.040
<v Speaker 2>like in the real world to understand that college isn't

1:09:10.479 --> 1:09:13.000
<v Speaker 2>like high school, but with more binge drinking, it can

1:09:13.040 --> 1:09:16.160
<v Speaker 2>be something different than that. And then the second thing

1:09:16.880 --> 1:09:22.240
<v Speaker 2>is to go to the cheapest, good enough school and

1:09:22.400 --> 1:09:26.640
<v Speaker 2>use the money to create experiences and a curriculum for

1:09:26.680 --> 1:09:30.840
<v Speaker 2>yourself so that you learn way more, way faster than

1:09:30.880 --> 1:09:34.840
<v Speaker 2>your peers. And most of those things require discipline, and

1:09:34.960 --> 1:09:39.800
<v Speaker 2>unfortunately that's hard to find. But if you can do that,

1:09:39.960 --> 1:09:41.120
<v Speaker 2>I think you come out ahead.

1:09:42.640 --> 1:09:44.640
<v Speaker 1>Tell me about the hard project that you might do

1:09:44.680 --> 1:09:46.320
<v Speaker 1>in a gap year.

1:09:47.160 --> 1:09:51.200
<v Speaker 2>So a friend of the family came to me years

1:09:51.200 --> 1:09:53.880
<v Speaker 2>ago and said I'd never met him. He said, my

1:09:54.000 --> 1:09:56.280
<v Speaker 2>dad knows you. He said you could tell me how

1:09:56.320 --> 1:09:59.280
<v Speaker 2>to get into Yale, And so I gave him ten

1:09:59.520 --> 1:10:02.000
<v Speaker 2>projects you could do, and one of them was fly

1:10:02.120 --> 1:10:04.040
<v Speaker 2>to India and figure out how to make enough money

1:10:04.040 --> 1:10:07.720
<v Speaker 2>to get home. Now, the problem with that project is

1:10:07.800 --> 1:10:10.400
<v Speaker 2>it doesn't take a year, and it's not particularly generous.

1:10:10.920 --> 1:10:12.000
<v Speaker 3>But if you.

1:10:12.160 --> 1:10:17.160
<v Speaker 2>Find a nonprofit that is working deep in a community

1:10:17.320 --> 1:10:20.160
<v Speaker 2>to help transform that community for the better, and you

1:10:20.320 --> 1:10:22.599
<v Speaker 2>commit to spending a year with them, you don't need

1:10:22.600 --> 1:10:24.360
<v Speaker 2>the Peace Corps to send you somewhere. You can do

1:10:24.439 --> 1:10:28.840
<v Speaker 2>that tomorrow. If you decide to start a record label,

1:10:28.880 --> 1:10:31.320
<v Speaker 2>which I did years ago, you can start a record

1:10:31.360 --> 1:10:35.760
<v Speaker 2>label tomorrow, run it for a year fully online, see

1:10:35.760 --> 1:10:39.800
<v Speaker 2>what happens right that. If you're doing that and you

1:10:39.920 --> 1:10:41.680
<v Speaker 2>know that you don't have to make money doing it,

1:10:41.720 --> 1:10:44.559
<v Speaker 2>you have to make a difference doing it, you will

1:10:44.640 --> 1:10:48.800
<v Speaker 2>learn an enormous amount compared to going tow NYU and

1:10:48.840 --> 1:10:50.680
<v Speaker 2>taking a class in music production.

1:10:53.240 --> 1:10:56.080
<v Speaker 1>You know you're talking about. Let you know, let's say

1:10:56.200 --> 1:10:58.920
<v Speaker 1>I take the path where I'm not going to go

1:10:58.960 --> 1:11:01.800
<v Speaker 1>to college. I read a week, I do this. I

1:11:01.920 --> 1:11:06.040
<v Speaker 1>have found amongst the people I know, other than the

1:11:06.200 --> 1:11:09.519
<v Speaker 1>very successful people I know who I know, no one

1:11:09.560 --> 1:11:10.920
<v Speaker 1>has this level of discipline.

1:11:12.600 --> 1:11:16.120
<v Speaker 2>Yeah, so where's the discipline come from? How long do

1:11:16.200 --> 1:11:20.840
<v Speaker 2>you need external discipline before you'll understand internal discipline? And

1:11:21.320 --> 1:11:23.959
<v Speaker 2>how can you practice it the same way you practice

1:11:23.960 --> 1:11:27.360
<v Speaker 2>the trumpet? Because I think you can practice discipline for

1:11:27.400 --> 1:11:30.120
<v Speaker 2>a week at a time. And so if you're asking

1:11:30.120 --> 1:11:32.080
<v Speaker 2>what I would say to a sixteen year old family friend,

1:11:33.120 --> 1:11:35.200
<v Speaker 2>the woman down the street who I worked with, she

1:11:35.280 --> 1:11:40.040
<v Speaker 2>put on a massive climate conference for high school students

1:11:40.040 --> 1:11:44.000
<v Speaker 2>in our county and over one hundred people came. She

1:11:44.120 --> 1:11:47.599
<v Speaker 2>had guest speakers. She got a grant on her own

1:11:47.680 --> 1:11:50.479
<v Speaker 2>from the Bloomberg Philanthropies, and she put this thing on.

1:11:51.800 --> 1:11:54.240
<v Speaker 2>If I look at what she did compared to all

1:11:54.240 --> 1:11:56.240
<v Speaker 2>the other students in her high school class, there's no

1:11:56.240 --> 1:11:59.360
<v Speaker 2>comparison how she spent the last six weeks. She's going

1:11:59.439 --> 1:12:03.240
<v Speaker 2>to remember this forever. She discovered she's not a fraud,

1:12:03.560 --> 1:12:06.920
<v Speaker 2>and she's discovered all the things that don't work and

1:12:07.000 --> 1:12:11.680
<v Speaker 2>some things that do. So no, don't skip college and

1:12:11.880 --> 1:12:13.759
<v Speaker 2>commit to a four year thing out of the blue.

1:12:14.520 --> 1:12:15.479
<v Speaker 1>But show me a one.

1:12:15.320 --> 1:12:17.640
<v Speaker 2>Week project, and then a three week project, and then

1:12:17.640 --> 1:12:19.800
<v Speaker 2>a five week project, and then go to a gap year.

1:12:20.080 --> 1:12:21.000
<v Speaker 3>And if you have no.

1:12:22.600 --> 1:12:25.759
<v Speaker 2>Self control whatsoever, yes, please go to the most famous

1:12:25.760 --> 1:12:28.080
<v Speaker 2>college you can pay for. Get on the track of

1:12:28.120 --> 1:12:30.400
<v Speaker 2>getting one of those scarce jobs where someone tells you.

1:12:30.320 --> 1:12:30.760
<v Speaker 3>What to do.

1:12:31.720 --> 1:12:36.480
<v Speaker 2>But for almost everybody else, it's this combination of generous persistence,

1:12:37.120 --> 1:12:41.000
<v Speaker 2>self discipline and solving an interesting problem, because if you

1:12:41.080 --> 1:12:44.040
<v Speaker 2>get good at solving interesting problems, you're never going to

1:12:44.360 --> 1:12:45.720
<v Speaker 2>need to go get a job.

1:12:47.439 --> 1:12:51.920
<v Speaker 1>Now. Ultra successful people, let's not talk about someone who

1:12:51.960 --> 1:12:54.760
<v Speaker 1>worked their way up at Procter and Gamble and is

1:12:54.800 --> 1:12:57.920
<v Speaker 1>now on their private jet people who have a more

1:12:58.240 --> 1:13:03.840
<v Speaker 1>entrepreneurial path. Are they all inherently using the vernacular fucked

1:13:03.920 --> 1:13:07.559
<v Speaker 1>up trying to fill some hole? Is that what drives?

1:13:07.680 --> 1:13:10.400
<v Speaker 1>Are there any well adjusted? I mean, look at someone

1:13:10.439 --> 1:13:14.080
<v Speaker 1>like Elon Musk, certainly a lot of success, but he's

1:13:14.080 --> 1:13:17.519
<v Speaker 1>evidence seeing the issues in his personality right out in public.

1:13:18.080 --> 1:13:21.720
<v Speaker 1>Does that go with the territory?

1:13:22.640 --> 1:13:25.519
<v Speaker 2>I would like to leave out of the discussion the

1:13:26.960 --> 1:13:29.759
<v Speaker 2>few handfuls of people who are in the media because

1:13:30.280 --> 1:13:34.519
<v Speaker 2>a lack of boundaries and media attention are a very

1:13:34.840 --> 1:13:39.960
<v Speaker 2>challenging problem for everybody else. And I know a lot

1:13:40.520 --> 1:13:44.280
<v Speaker 2>of people who have succeeded on their own with projects

1:13:44.320 --> 1:13:50.200
<v Speaker 2>as entrepreneurs. Most of them are well adjusted. There's a

1:13:50.240 --> 1:13:53.920
<v Speaker 2>game being played here and they don't take it too seriously,

1:13:54.080 --> 1:13:55.599
<v Speaker 2>and they see the game.

1:13:56.800 --> 1:13:58.400
<v Speaker 1>And when I.

1:13:58.479 --> 1:14:01.960
<v Speaker 2>Started, I took it all personally. And when you take

1:14:02.000 --> 1:14:04.640
<v Speaker 2>it personally, it doesn't feel like a game. When you

1:14:04.680 --> 1:14:07.479
<v Speaker 2>take it personally, you get rejected. I get eight hundred

1:14:07.479 --> 1:14:10.320
<v Speaker 2>rejections in a row from New York publishers. It feels

1:14:10.360 --> 1:14:13.479
<v Speaker 2>like they are rejecting you, and it takes a while

1:14:13.560 --> 1:14:16.640
<v Speaker 2>to realize they don't know me. They're just rejecting what

1:14:16.760 --> 1:14:23.280
<v Speaker 2>I sent them. What we have now is this weird

1:14:23.760 --> 1:14:26.519
<v Speaker 2>media structure where you're supposed to be vulnerable and you're

1:14:26.560 --> 1:14:29.720
<v Speaker 2>supposed to be authentic, which I think is nonsense if

1:14:29.760 --> 1:14:32.400
<v Speaker 2>you're trying to strangers and then when it doesn't work,

1:14:32.760 --> 1:14:35.839
<v Speaker 2>you end up in a ball on the floor instead

1:14:35.880 --> 1:14:38.479
<v Speaker 2>of saying this was the move. I brought this to

1:14:38.560 --> 1:14:41.639
<v Speaker 2>the world. That happened. How do I do it differently

1:14:41.760 --> 1:14:45.040
<v Speaker 2>next time? And I believe that's what great musicians do,

1:14:45.439 --> 1:14:49.120
<v Speaker 2>particularly jazz musicians. You watch a jazz musician and they

1:14:49.280 --> 1:14:52.439
<v Speaker 2>know when they're launching into the next lick that in

1:14:52.479 --> 1:14:55.320
<v Speaker 2>this setting, in this room, it's going to work. And

1:14:55.360 --> 1:14:58.080
<v Speaker 2>the reason they know that is because they've done it

1:14:58.560 --> 1:15:01.639
<v Speaker 2>before and they see the difference in the room between

1:15:01.640 --> 1:15:04.559
<v Speaker 2>one that's going to work and one that doesn't. And

1:15:04.960 --> 1:15:09.720
<v Speaker 2>that's the opportunity amidst all the chaos and mailstroam that

1:15:09.760 --> 1:15:13.160
<v Speaker 2>we're in of solving interesting problems. Is you can practice

1:15:13.200 --> 1:15:16.160
<v Speaker 2>without a medical degree, without a legal degree, without a

1:15:16.160 --> 1:15:19.880
<v Speaker 2>business degree. You can practice human interaction and get better

1:15:19.920 --> 1:15:20.200
<v Speaker 2>at it.

1:15:21.960 --> 1:15:26.280
<v Speaker 1>Switching gears. Once again, there are different This is streaming

1:15:26.360 --> 1:15:31.679
<v Speaker 1>television Netflick releases all episodes of the series at Once

1:15:33.880 --> 1:15:37.000
<v Speaker 1>Prime used to do that sort of at this point,

1:15:37.040 --> 1:15:42.200
<v Speaker 1>but the other competitors, Disney, Paramount, Apple do not. What's

1:15:42.240 --> 1:15:43.280
<v Speaker 1>your insight there?

1:15:43.800 --> 1:15:44.639
<v Speaker 3>Yeah, I read.

1:15:44.439 --> 1:15:46.280
<v Speaker 2>You were ranting about this the other day. You and

1:15:46.320 --> 1:15:49.960
<v Speaker 2>I disagree, which happens from time to time. I was

1:15:49.960 --> 1:15:52.680
<v Speaker 2>talking to Ted Sarandos at Netflix. I said, Ted, I

1:15:52.680 --> 1:15:56.920
<v Speaker 2>only want to ask you one question. I completely understand

1:15:57.200 --> 1:16:02.000
<v Speaker 2>why you started with binging, and the reason is this.

1:16:03.240 --> 1:16:07.000
<v Speaker 2>What Ted and Reid figured out how to do was

1:16:07.080 --> 1:16:11.560
<v Speaker 2>use stock market money to send a signal to Hollywood

1:16:11.640 --> 1:16:15.280
<v Speaker 2>and to viewers that you couldn't live without Netflix. And

1:16:15.320 --> 1:16:19.000
<v Speaker 2>the way they differentiated themselves from every other way you

1:16:19.040 --> 1:16:23.080
<v Speaker 2>could watch television is they weren't gonna hold TV hostage.

1:16:23.439 --> 1:16:25.880
<v Speaker 2>You can have all you wanted. The only way you

1:16:25.880 --> 1:16:27.799
<v Speaker 2>can do that is if you have an enormous amount

1:16:27.800 --> 1:16:31.240
<v Speaker 2>of money, because you blow through one hundred million dollars

1:16:31.320 --> 1:16:36.200
<v Speaker 2>TV series in a day. Right, So it was brilliant,

1:16:37.160 --> 1:16:42.400
<v Speaker 2>but now they won, and once they won, it's not

1:16:42.560 --> 1:16:45.040
<v Speaker 2>in their interest to keep allowing people to do this.

1:16:45.640 --> 1:16:48.800
<v Speaker 2>And the reason is what they gave up was the

1:16:48.800 --> 1:16:53.320
<v Speaker 2>water cooler conversation. Because if you've seen seven episodes of

1:16:53.400 --> 1:16:55.880
<v Speaker 2>Lydia poet, and I've seen one. If you talk to

1:16:55.920 --> 1:16:57.559
<v Speaker 2>me about it, you're going to ruin it for me.

1:16:58.040 --> 1:16:59.800
<v Speaker 2>So you don't talk about it the way you would

1:16:59.840 --> 1:17:04.360
<v Speaker 2>if it was on every Monday. And so I said, ted,

1:17:04.400 --> 1:17:08.400
<v Speaker 2>why do you keep doing this? And it was fascinating

1:17:08.920 --> 1:17:13.200
<v Speaker 2>because I thought he would have a detailed, nuanced database

1:17:13.800 --> 1:17:16.920
<v Speaker 2>research answer. And he said, because that's what we do.

1:17:18.280 --> 1:17:21.080
<v Speaker 2>It's been built into the culture. But I can show

1:17:21.120 --> 1:17:23.439
<v Speaker 2>you the economics of it. They should stop, and I

1:17:23.439 --> 1:17:29.519
<v Speaker 2>think they will because they can't keep burning shareholder money

1:17:29.560 --> 1:17:33.040
<v Speaker 2>the way they were and the game theory of it

1:17:33.080 --> 1:17:33.880
<v Speaker 2>doesn't make sense.

1:17:34.640 --> 1:17:37.000
<v Speaker 1>Tell me more about the game theory and game theory

1:17:37.040 --> 1:17:38.599
<v Speaker 1>in general in business.

1:17:38.720 --> 1:17:41.360
<v Speaker 2>Okay, So game theory has nothing to do with monopoly

1:17:41.400 --> 1:17:45.920
<v Speaker 2>and everything to do with understanding what people do when

1:17:45.960 --> 1:17:52.400
<v Speaker 2>they each seek to maximize their benefit. So everyone understands

1:17:52.439 --> 1:17:54.880
<v Speaker 2>tic tac toe, and we understand you shouldn't go in

1:17:54.920 --> 1:17:56.439
<v Speaker 2>one of the side pieces, you should go in the

1:17:56.479 --> 1:17:59.519
<v Speaker 2>center because that forces the other person to go certain ways.

1:18:00.240 --> 1:18:03.400
<v Speaker 2>So Netflix looks at the world a lot of entrenched players,

1:18:03.479 --> 1:18:06.200
<v Speaker 2>people with lots of backlists and lots of libraries, and say,

1:18:06.680 --> 1:18:11.439
<v Speaker 2>we can't possibly make enough really really good shows in

1:18:11.479 --> 1:18:14.960
<v Speaker 2>a very short period of time that will get people

1:18:15.479 --> 1:18:17.720
<v Speaker 2>to join us for money when they could watch these

1:18:17.720 --> 1:18:21.200
<v Speaker 2>other things on television for free. So what we're going

1:18:21.280 --> 1:18:24.360
<v Speaker 2>to do is play a game they can't play. And

1:18:24.400 --> 1:18:26.599
<v Speaker 2>this is the key to strategy, playing a game your

1:18:26.680 --> 1:18:30.160
<v Speaker 2>competitors can't or won't play. And the game they could

1:18:30.160 --> 1:18:33.200
<v Speaker 2>play is they could sell more stock anytime they wanted.

1:18:33.200 --> 1:18:35.599
<v Speaker 2>They could lose as much money as they wanted as

1:18:35.600 --> 1:18:39.040
<v Speaker 2>long as they were getting new subscribers. And by saying

1:18:39.720 --> 1:18:44.679
<v Speaker 2>to NBC or HBO, we're going to break your cardinal rule.

1:18:44.760 --> 1:18:47.160
<v Speaker 2>We're gonna take our best show and just blow it

1:18:47.240 --> 1:18:52.519
<v Speaker 2>all in one day, the opposition couldn't respond because they

1:18:52.520 --> 1:18:55.640
<v Speaker 2>didn't have enough money or inventory to catch up to

1:18:55.720 --> 1:18:59.479
<v Speaker 2>that game. So they redefine the game the same way.

1:19:00.840 --> 1:19:05.799
<v Speaker 2>When you look at Hotmail, which revolutionized viral marketing, everybody

1:19:05.800 --> 1:19:09.320
<v Speaker 2>else was charging for email accounts. Hotmail built a company

1:19:09.360 --> 1:19:11.719
<v Speaker 2>that was structured so they could give it away for free.

1:19:12.400 --> 1:19:15.400
<v Speaker 2>By making that move, they undid the game that everyone

1:19:15.400 --> 1:19:18.840
<v Speaker 2>else had no choice but to play. So what we

1:19:19.000 --> 1:19:23.920
<v Speaker 2>you know? And when Rick Rubin leaned into hip hop,

1:19:24.439 --> 1:19:28.360
<v Speaker 2>he was making the bet that the big guys weren't

1:19:28.400 --> 1:19:31.439
<v Speaker 2>willing to go where he was going to go, and

1:19:32.160 --> 1:19:34.400
<v Speaker 2>he was right. It took them a very long time

1:19:34.800 --> 1:19:37.800
<v Speaker 2>for the people who were running those labels to get

1:19:37.840 --> 1:19:41.599
<v Speaker 2>comfortable bringing out the music he was bringing out because

1:19:41.600 --> 1:19:46.200
<v Speaker 2>of their upbringing compared to his moment in time. So again,

1:19:46.240 --> 1:19:49.559
<v Speaker 2>what we're seeking to do with game theory is understand

1:19:49.560 --> 1:19:52.320
<v Speaker 2>the rules of the game and then make moves that

1:19:52.439 --> 1:19:55.280
<v Speaker 2>either box out the other people or moves that they

1:19:55.280 --> 1:19:56.280
<v Speaker 2>are unwilling to make.

1:20:04.000 --> 1:20:08.080
<v Speaker 1>Okay, staying on streaming television, Apple uses the old model

1:20:08.160 --> 1:20:14.479
<v Speaker 1>of an episode a week, right, financial disaster. Okay, Now

1:20:14.520 --> 1:20:19.599
<v Speaker 1>they're leaving intentionally certain low hanging exploitative fruit on the ground.

1:20:19.720 --> 1:20:22.839
<v Speaker 1>It's like they won't just do something with titillation, nudity.

1:20:23.000 --> 1:20:29.800
<v Speaker 1>Whatever they do these high cost productions, there is no catalog,

1:20:30.000 --> 1:20:36.880
<v Speaker 1>no backlist like Netflix licenses or now actually owns. Sir,

1:20:38.640 --> 1:20:39.719
<v Speaker 1>what would you tell Apple?

1:20:40.400 --> 1:20:43.599
<v Speaker 2>Okay, So let's be clear. Apple TV does not exist

1:20:43.600 --> 1:20:47.120
<v Speaker 2>to make a profit, and if you are looking at

1:20:47.160 --> 1:20:50.400
<v Speaker 2>it through the lens of making a profit, it would

1:20:50.600 --> 1:20:55.680
<v Speaker 2>it seems like a mystery. Apple TV exists to be

1:20:56.520 --> 1:21:00.720
<v Speaker 2>a branded arm of a luxury goods company. Apple is

1:21:00.760 --> 1:21:04.360
<v Speaker 2>the most successful luxury goods company of all time. You

1:21:04.400 --> 1:21:08.960
<v Speaker 2>can buy a phone that does almost everything an iPhone

1:21:09.000 --> 1:21:12.240
<v Speaker 2>does for a lot less money. The one thing it

1:21:12.360 --> 1:21:16.080
<v Speaker 2>doesn't do is give you the blue bubble and the

1:21:16.080 --> 1:21:23.479
<v Speaker 2>Apple logo, and so that is supported by the halo

1:21:23.760 --> 1:21:27.519
<v Speaker 2>of something like Apple TV. So what Apple needs to

1:21:27.640 --> 1:21:33.080
<v Speaker 2>keep doing is create this reality distortion field around the

1:21:33.240 --> 1:21:36.880
<v Speaker 2>value of what they make and sell people identity.

1:21:39.040 --> 1:21:42.320
<v Speaker 1>Staying with Apple for a second, Steve Jobs famously did

1:21:42.479 --> 1:21:46.800
<v Speaker 1>no market research. What's your view on market research? Well,

1:21:46.840 --> 1:21:49.519
<v Speaker 1>Steve did a lot of market research. What he didn't

1:21:49.520 --> 1:21:55.280
<v Speaker 1>do was pay consultants for traditional market research. What Steve

1:21:55.400 --> 1:22:01.440
<v Speaker 1>did was he had an intuitive understanding of the needs, desires,

1:22:01.479 --> 1:22:05.120
<v Speaker 1>and identity of the people who would propel his thing forward,

1:22:06.160 --> 1:22:09.800
<v Speaker 1>and he played it like a violin. He totally understood

1:22:10.240 --> 1:22:13.640
<v Speaker 1>status roles and how to turn this thing that was

1:22:13.680 --> 1:22:18.120
<v Speaker 1>for geeks into a luxury good. Most market research, most

1:22:18.160 --> 1:22:23.719
<v Speaker 1>focus groups exist to make the committee happy. They don't

1:22:23.760 --> 1:22:31.480
<v Speaker 1>exist to lead to hard decisions, and corporations are organizations

1:22:31.520 --> 1:22:34.559
<v Speaker 1>that stick around for a while, and there's a lot

1:22:34.800 --> 1:22:39.040
<v Speaker 1>of soft tissue in between the various people and market

1:22:39.080 --> 1:22:42.240
<v Speaker 1>research can be used as a tool a lever to

1:22:42.320 --> 1:22:45.280
<v Speaker 1>help people empower stay in power, but it is not

1:22:45.560 --> 1:22:53.240
<v Speaker 1>often used to help them make better decisions. Okay, on

1:22:53.439 --> 1:23:03.160
<v Speaker 1>the same point here with making decisions. Ultimately, let me

1:23:03.200 --> 1:23:07.559
<v Speaker 1>put it down. A mature business, Okay, skiing. Skiing in

1:23:07.600 --> 1:23:12.360
<v Speaker 1>the sixties, it was a middle class sport. Everybody did it. Okay.

1:23:12.439 --> 1:23:14.920
<v Speaker 1>Starting in the late eighties they put in these high

1:23:15.000 --> 1:23:19.599
<v Speaker 1>speed lists, which costs a lot of money, improve the experience. Okay.

1:23:20.160 --> 1:23:24.759
<v Speaker 1>Now there's been consolidation. There's two major companies which actually

1:23:24.800 --> 1:23:28.160
<v Speaker 1>are spreading from the United States to internationally. Now a

1:23:28.320 --> 1:23:33.719
<v Speaker 1>there's a perception problem because skiing is never been cheaper

1:23:33.920 --> 1:23:37.120
<v Speaker 1>to actually do, never mind the number of lodging and food,

1:23:37.160 --> 1:23:40.880
<v Speaker 1>et cetera. But it's a mature business. Where does a

1:23:40.920 --> 1:23:45.000
<v Speaker 1>mature business go from here? They're not Sierra Club. You

1:23:45.040 --> 1:23:49.960
<v Speaker 1>can't build more ski areas, concert promotion. We have Live

1:23:50.120 --> 1:23:54.160
<v Speaker 1>Nation in aeg Okay, used to be the land of renegades.

1:23:54.200 --> 1:23:57.960
<v Speaker 1>When you have a mature business, what happens next?

1:23:58.680 --> 1:24:02.400
<v Speaker 2>So, uh, your rant on this with Zach Cune was brilliant.

1:24:02.479 --> 1:24:03.680
<v Speaker 2>I loved listening to it.

1:24:03.840 --> 1:24:04.080
<v Speaker 3>Zach.

1:24:04.360 --> 1:24:05.479
<v Speaker 2>I don't know if he told you it was my

1:24:05.520 --> 1:24:08.200
<v Speaker 2>next door neighbor, so I watched him grow up. He

1:24:08.200 --> 1:24:12.559
<v Speaker 2>doesn't live in New York anymore, but skiing is, and

1:24:12.640 --> 1:24:14.240
<v Speaker 2>I did it for a very long time until I

1:24:14.240 --> 1:24:18.759
<v Speaker 2>directed both my shoulders. Skiing is clearly a mature industry,

1:24:18.760 --> 1:24:22.200
<v Speaker 2>but it's also a luxury good. It's a luxury good

1:24:23.040 --> 1:24:31.679
<v Speaker 2>because it costs way more for the actual athletic moments

1:24:31.720 --> 1:24:36.720
<v Speaker 2>of it then it's worth. What you're paying for is

1:24:37.479 --> 1:24:39.360
<v Speaker 2>the way it feels to go, the way it feels

1:24:39.360 --> 1:24:41.960
<v Speaker 2>to talk about it, the way it feels to put

1:24:42.000 --> 1:24:43.760
<v Speaker 2>on the equipment, the way it feels to be in

1:24:43.800 --> 1:24:47.439
<v Speaker 2>the lodge. That is what is actually for sale. The

1:24:47.520 --> 1:24:50.000
<v Speaker 2>data I saw a few years ago is that the

1:24:50.080 --> 1:24:53.160
<v Speaker 2>typical visitor to Veil was on the slopes for less

1:24:53.160 --> 1:24:57.439
<v Speaker 2>than forty five minutes a day. Because that's just a

1:24:57.520 --> 1:25:01.000
<v Speaker 2>tiny part of what is for sale the nation skiing

1:25:02.280 --> 1:25:05.240
<v Speaker 2>I went. I grew up skiing at Kissing Bridge in Buffalo,

1:25:05.320 --> 1:25:07.559
<v Speaker 2>which is basically a big hill, and you could do

1:25:07.600 --> 1:25:10.920
<v Speaker 2>thirteen runs in an hour. And so the people who

1:25:10.920 --> 1:25:14.760
<v Speaker 2>went there to ski, they were skiing, they weren't partaking

1:25:14.800 --> 1:25:19.559
<v Speaker 2>in the luxury lifestyle of skiing. So what to be done, well,

1:25:20.040 --> 1:25:27.840
<v Speaker 2>what's always done with an end of cycle. Stable businesses

1:25:28.040 --> 1:25:31.639
<v Speaker 2>is you raise the price for the people who are

1:25:31.680 --> 1:25:38.360
<v Speaker 2>committed to going. It is really, really difficult to capture

1:25:38.400 --> 1:25:44.240
<v Speaker 2>the next generation because you don't have the network effect,

1:25:44.280 --> 1:25:48.040
<v Speaker 2>the viral connection that causes the next generation to come

1:25:48.120 --> 1:25:50.599
<v Speaker 2>in the numbers. You need them to come to keep

1:25:50.640 --> 1:25:54.640
<v Speaker 2>the business going on in the way you wanted it

1:25:54.680 --> 1:25:58.960
<v Speaker 2>to go, the same way if you had you know,

1:25:59.120 --> 1:26:02.080
<v Speaker 2>whether it's Georgia or Armani or Heart Shaftner and Marx

1:26:02.680 --> 1:26:05.600
<v Speaker 2>hart Schafter in Marx doesn't have a prayer of capturing

1:26:05.640 --> 1:26:08.360
<v Speaker 2>people who are twenty years old. People are twenty years

1:26:08.400 --> 1:26:11.600
<v Speaker 2>old are never gonna wear three piece suits. It's not

1:26:11.720 --> 1:26:16.520
<v Speaker 2>coming back. And so what I think it's worth embracing

1:26:16.560 --> 1:26:21.840
<v Speaker 2>is Schumpeter's creative destruction. There's nothing that says this particular

1:26:21.920 --> 1:26:25.680
<v Speaker 2>corporation is entitled to last. And the half life of

1:26:25.720 --> 1:26:31.080
<v Speaker 2>American corporations keeps getting shorter because people stick around, but

1:26:31.680 --> 1:26:35.360
<v Speaker 2>brands and corporate entities they're designed to be disposable.

1:26:36.720 --> 1:26:40.280
<v Speaker 1>Well, staying on that same point, antitrust, I have a

1:26:40.320 --> 1:26:43.680
<v Speaker 1>friend who is a liberal who does not believe in

1:26:43.760 --> 1:26:49.640
<v Speaker 1>the antitrust enforcement, believing that the marketplace will always ultimately

1:26:50.680 --> 1:26:52.280
<v Speaker 1>come into competition.

1:26:53.120 --> 1:26:53.360
<v Speaker 3>He is.

1:26:53.520 --> 1:26:56.760
<v Speaker 1>Example would be I'm gonna ask your take.

1:26:57.040 --> 1:27:00.719
<v Speaker 3>That's why having trouble with keeping my take to myself.

1:27:00.720 --> 1:27:02.680
<v Speaker 3>But go ahead, yes, no, no, I want to hear your take.

1:27:02.720 --> 1:27:07.200
<v Speaker 1>Okay. He we know Google's search has now been challenged

1:27:07.200 --> 1:27:11.799
<v Speaker 1>by Amazon by TikTok have by the same token. Google

1:27:11.920 --> 1:27:15.800
<v Speaker 1>is being sued because they have monopoly on advertising. What

1:27:15.960 --> 1:27:18.800
<v Speaker 1>is your belief in the anti trust and monopoly?

1:27:19.400 --> 1:27:19.879
<v Speaker 3>Okay?

1:27:20.160 --> 1:27:23.960
<v Speaker 2>So we begin with Adam Smith, who I think everyone

1:27:24.000 --> 1:27:28.599
<v Speaker 2>can agree is the known father of capitalism. He has

1:27:29.400 --> 1:27:34.839
<v Speaker 2>many lines that say the biggest defect in capitalism is monopoly.

1:27:35.479 --> 1:27:40.880
<v Speaker 2>Monopoly is broken capitalism. And the reason is simple because

1:27:41.120 --> 1:27:45.559
<v Speaker 2>once a company gets to a certain scale, the single

1:27:45.640 --> 1:27:49.800
<v Speaker 2>most profitable thing they can do is create the conditions

1:27:49.920 --> 1:27:54.720
<v Speaker 2>to have no competition, to lock people in. And if

1:27:54.760 --> 1:27:58.240
<v Speaker 2>they do that again, the math is super easy to show.

1:27:59.000 --> 1:28:05.760
<v Speaker 2>The consumers do not benefit that it harms everyone involved.

1:28:06.280 --> 1:28:14.040
<v Speaker 2>And so what we need is what Coreydoctor calls adversarial interoperability.

1:28:14.600 --> 1:28:18.519
<v Speaker 2>Adversarial interoperability says, go ahead, get as big as you want,

1:28:18.760 --> 1:28:24.519
<v Speaker 2>but you must build doorways so that competitors can play

1:28:25.040 --> 1:28:28.920
<v Speaker 2>in a way that gives customers a choice, because the market,

1:28:28.960 --> 1:28:32.960
<v Speaker 2>when it works, is about giving customers a choice. Now,

1:28:33.520 --> 1:28:38.000
<v Speaker 2>what ended up happening here when antitrust began to get

1:28:38.160 --> 1:28:44.719
<v Speaker 2>corrupted in the seventies and the eighties is simple. Milton

1:28:44.720 --> 1:28:48.800
<v Speaker 2>Friedman plus others started trying to persuade us that the

1:28:48.840 --> 1:28:52.880
<v Speaker 2>purpose of our culture is to enable capitalism. They got

1:28:52.880 --> 1:28:57.280
<v Speaker 2>it backwards. The purpose of capitalism is to enable our culture.

1:28:58.320 --> 1:29:02.000
<v Speaker 2>And as long as the market is actually free, where

1:29:02.040 --> 1:29:05.519
<v Speaker 2>people can make a choice, that is more likely to happen.

1:29:06.080 --> 1:29:10.439
<v Speaker 2>But when monopolists are unfettered and can lock people in

1:29:11.080 --> 1:29:16.280
<v Speaker 2>their choices, go away, and nobody benefits except the monopolist,

1:29:16.360 --> 1:29:18.160
<v Speaker 2>and in the long run, the monopolist doesn't do as

1:29:18.160 --> 1:29:20.960
<v Speaker 2>well either. If Microsoft had agreed to be broken up

1:29:21.000 --> 1:29:24.599
<v Speaker 2>all those years ago, or IBM, both those companies would

1:29:24.600 --> 1:29:26.760
<v Speaker 2>be doing better today than if they had fought as

1:29:26.800 --> 1:29:28.080
<v Speaker 2>hard as they did to stay.

1:29:27.880 --> 1:29:32.880
<v Speaker 1>Together, giving IBM just staying with Microsoft. What would Microsoft

1:29:32.920 --> 1:29:34.400
<v Speaker 1>look like today if you've been broken out?

1:29:34.960 --> 1:29:38.639
<v Speaker 2>So Microsoft got in trouble and I was a victim

1:29:38.640 --> 1:29:41.280
<v Speaker 2>of one of their hijinks years and years ago, because

1:29:41.320 --> 1:29:45.200
<v Speaker 2>they owned the operating system, they owned the web browser,

1:29:45.680 --> 1:29:49.040
<v Speaker 2>they owned the software stack, and they kept feeding them

1:29:49.040 --> 1:29:51.759
<v Speaker 2>one into the other into the other. So for example,

1:29:51.880 --> 1:29:54.960
<v Speaker 2>you click on a link in word and you had

1:29:54.960 --> 1:29:57.599
<v Speaker 2>no choice but to have Internet Explorer to be able

1:29:57.640 --> 1:30:00.160
<v Speaker 2>to look at what it had. So you can seeeople

1:30:00.160 --> 1:30:02.160
<v Speaker 2>would suffer because there's no incentive to make a better

1:30:02.640 --> 1:30:07.519
<v Speaker 2>web browser if the it doesn't hook up right. And

1:30:08.520 --> 1:30:13.920
<v Speaker 2>if the shareholders end up with each one of the platforms,

1:30:14.760 --> 1:30:18.800
<v Speaker 2>then the amount of value that's produced for consumers goes up.

1:30:19.320 --> 1:30:21.840
<v Speaker 2>And when the amount of value that's produced goes up,

1:30:22.200 --> 1:30:24.040
<v Speaker 2>each one of those companies, even if they're not going

1:30:24.080 --> 1:30:27.040
<v Speaker 2>to have one hundred percent share, will end up being

1:30:27.040 --> 1:30:31.599
<v Speaker 2>more resilient and do better over time. And so when

1:30:31.640 --> 1:30:34.360
<v Speaker 2>they broke up at and T and built the baby Bells,

1:30:34.720 --> 1:30:37.280
<v Speaker 2>I think, I mean, we didn't have mobile phones. Fax

1:30:37.360 --> 1:30:40.160
<v Speaker 2>machines were pain in the neck. Think about the explosion

1:30:40.840 --> 1:30:45.639
<v Speaker 2>in what we could do with telecommunications once different companies

1:30:45.640 --> 1:30:49.600
<v Speaker 2>could play in a different way. And so instead of

1:30:49.600 --> 1:30:52.679
<v Speaker 2>spending all that time and money having an existential fight

1:30:52.880 --> 1:30:54.960
<v Speaker 2>about breaking up, if they said, all right, we're going

1:30:55.000 --> 1:30:57.240
<v Speaker 2>to build the breast browser in the world, and now

1:30:57.280 --> 1:30:59.439
<v Speaker 2>it's going to work with every word processor, and we're

1:30:59.439 --> 1:31:01.360
<v Speaker 2>going to build the best software stack in the world,

1:31:01.400 --> 1:31:03.880
<v Speaker 2>but now it's going to work with every operating system

1:31:03.920 --> 1:31:06.639
<v Speaker 2>and on and on and on. They would have ended

1:31:06.720 --> 1:31:11.040
<v Speaker 2>up way ahead of the game. And that's that's largely

1:31:11.080 --> 1:31:11.840
<v Speaker 2>what they're trying to do.

1:31:11.960 --> 1:31:17.879
<v Speaker 1>Now, let's be very specific with Google, which has almost

1:31:18.000 --> 1:31:21.320
<v Speaker 1>all the market share and conventional search. Yeah, what would

1:31:21.360 --> 1:31:23.520
<v Speaker 1>be the best solution there for everybody?

1:31:24.160 --> 1:31:28.479
<v Speaker 2>Okay, So I built a company to raise money for

1:31:28.600 --> 1:31:31.880
<v Speaker 2>charity called squid Doo before social media really caught on.

1:31:32.000 --> 1:31:35.040
<v Speaker 2>We were the fortieth biggest website in the entire country.

1:31:35.160 --> 1:31:38.559
<v Speaker 2>I had eight employees. There were three hundred thousand people

1:31:38.680 --> 1:31:42.320
<v Speaker 2>building websites. Most of the money they were value they

1:31:42.320 --> 1:31:46.200
<v Speaker 2>were creating was going to charity, and again we were fortieth.

1:31:46.720 --> 1:31:50.040
<v Speaker 2>One day, Google did the math and realized that we

1:31:50.040 --> 1:31:54.400
<v Speaker 2>were sending a lot of traffic to Amazon, and Amazon

1:31:54.720 --> 1:31:56.680
<v Speaker 2>if they were getting traffic from us, wouldn't have to

1:31:56.680 --> 1:32:00.920
<v Speaker 2>pay Google as their largest advertiser for promotion. So our

1:32:01.000 --> 1:32:04.320
<v Speaker 2>traffic in one day went from being the fortieth biggest

1:32:04.320 --> 1:32:07.959
<v Speaker 2>website in the world to forty millionth They turned.

1:32:07.760 --> 1:32:10.679
<v Speaker 3>Us off just like that, flip the switch.

1:32:11.320 --> 1:32:13.599
<v Speaker 2>So even though it hurt me, in three hundred thousand

1:32:13.680 --> 1:32:17.479
<v Speaker 2>other people. That's not my point. My point is when

1:32:17.479 --> 1:32:21.719
<v Speaker 2>you have one person who has the switch, they can't

1:32:21.720 --> 1:32:24.559
<v Speaker 2>help it as a public company, but to keep flipping it,

1:32:24.680 --> 1:32:27.000
<v Speaker 2>to keep pushing. So you may remember the old days

1:32:27.000 --> 1:32:30.840
<v Speaker 2>of Google, the homepage would have maybe one ad on it,

1:32:30.880 --> 1:32:33.479
<v Speaker 2>maybe a few on the side, and now there's almost

1:32:33.479 --> 1:32:36.559
<v Speaker 2>no links whatsoever because they said to the people in

1:32:36.600 --> 1:32:39.160
<v Speaker 2>the ad business, make as much money as you can

1:32:39.240 --> 1:32:43.439
<v Speaker 2>by any means necessary. So this doesn't help consumers. It

1:32:43.479 --> 1:32:47.160
<v Speaker 2>also doesn't really help advertisers, and it doesn't help the

1:32:47.240 --> 1:32:51.520
<v Speaker 2>ecosystem that's being built. So there are lots of suggestions

1:32:51.560 --> 1:32:54.040
<v Speaker 2>as to how a company like this could work. But

1:32:54.160 --> 1:32:59.719
<v Speaker 2>imagine the following. You've got Google, the search core, which

1:32:59.880 --> 1:33:03.080
<v Speaker 2>likes this is itself to anybody who wants to start

1:33:03.120 --> 1:33:05.800
<v Speaker 2>an ad network, and you've got all these different ad

1:33:05.840 --> 1:33:10.120
<v Speaker 2>networks that work together with different search engines and different

1:33:10.240 --> 1:33:14.400
<v Speaker 2>interfaces to create different experiences for different kinds of users.

1:33:15.360 --> 1:33:18.760
<v Speaker 2>The end result would be the market would decide which

1:33:18.840 --> 1:33:22.320
<v Speaker 2>kind of interface and experience they wanted when they were searching,

1:33:22.680 --> 1:33:26.360
<v Speaker 2>and the ones that weren't serving their consumers well would

1:33:26.360 --> 1:33:30.320
<v Speaker 2>fade away. Advertisers would want to pay extra to go

1:33:30.400 --> 1:33:33.559
<v Speaker 2>to places that work better for them and the consumers, etc.

1:33:33.840 --> 1:33:36.800
<v Speaker 2>It wouldn't be one organization saying how do we make

1:33:36.840 --> 1:33:43.240
<v Speaker 2>this quarter's numbers? It would instead be an ecosystem of solutions.

1:33:44.240 --> 1:33:48.000
<v Speaker 2>And I was at Yahoo when Yahoo tried to be

1:33:48.080 --> 1:33:51.759
<v Speaker 2>the monopoly that Google is today, and it's really toxic

1:33:51.840 --> 1:33:54.920
<v Speaker 2>in the end because you have to make compromises that

1:33:54.960 --> 1:33:55.680
<v Speaker 2>you're not proud of.

1:33:58.960 --> 1:34:02.560
<v Speaker 1>Okay, just taking me with the ads, The user experience

1:34:02.640 --> 1:34:05.760
<v Speaker 1>on Amazon is terrible. Now you can't find what you're

1:34:05.800 --> 1:34:10.679
<v Speaker 1>looking for. Is their room for a competitor? What advice

1:34:10.720 --> 1:34:13.400
<v Speaker 1>would you give to Amazon itself? Right?

1:34:13.520 --> 1:34:18.160
<v Speaker 2>So Amazon only makes a little bit of their money

1:34:18.400 --> 1:34:22.800
<v Speaker 2>by selling things like books, and they make billions of

1:34:22.800 --> 1:34:25.400
<v Speaker 2>dollars selling the ads. So how does this work?

1:34:25.920 --> 1:34:26.240
<v Speaker 1>Well?

1:34:27.080 --> 1:34:29.560
<v Speaker 2>For many products, the only way that you're going to

1:34:29.600 --> 1:34:31.800
<v Speaker 2>get any clicks at all is by buying ads because

1:34:31.840 --> 1:34:34.479
<v Speaker 2>that's what people see. So how do you pay for

1:34:34.560 --> 1:34:37.840
<v Speaker 2>the ads? Well, Amazon has a policy that you have

1:34:37.880 --> 1:34:40.799
<v Speaker 2>to offer the lowest price you offer anywhere on Amazon.

1:34:41.479 --> 1:34:44.439
<v Speaker 2>So instead these companies raise their price on other sites

1:34:44.760 --> 1:34:48.439
<v Speaker 2>to make enough money to have their ads run on Amazon,

1:34:48.479 --> 1:34:52.160
<v Speaker 2>which means that Amazon becomes more attractive to consumers because

1:34:52.320 --> 1:34:55.320
<v Speaker 2>the price of the thing everywhere else is higher. So

1:34:55.360 --> 1:34:59.919
<v Speaker 2>this is a death spiral that doesn't help anybody except Amazon.

1:35:00.920 --> 1:35:04.320
<v Speaker 2>And their thesis would be, well, if it's legal, we

1:35:04.400 --> 1:35:08.479
<v Speaker 2>can do it. And community action is the spirit of

1:35:08.479 --> 1:35:10.519
<v Speaker 2>saying yeah, but we're the community and we are coming

1:35:10.560 --> 1:35:16.160
<v Speaker 2>together saying you can't do that anymore. And Amazon is

1:35:16.160 --> 1:35:19.040
<v Speaker 2>filled with some very smart people who can solve problems

1:35:19.080 --> 1:35:21.920
<v Speaker 2>when you give them constraints. And so there are plenty

1:35:21.920 --> 1:35:25.320
<v Speaker 2>of constraints. I can imagine where you can say there

1:35:25.320 --> 1:35:29.320
<v Speaker 2>are different ways that the algorithm can be used, different

1:35:29.439 --> 1:35:32.400
<v Speaker 2>sorts that could be available, different kinds of experiences you

1:35:32.439 --> 1:35:34.519
<v Speaker 2>can have. And there's a warehouse company that knows how

1:35:34.560 --> 1:35:37.320
<v Speaker 2>to ship stuff, and there's a website company that knows

1:35:37.320 --> 1:35:39.120
<v Speaker 2>how to run things on the web.

1:35:39.720 --> 1:35:40.519
<v Speaker 3>But having it.

1:35:40.479 --> 1:35:43.439
<v Speaker 2>All in one place with a tiny group deciding what

1:35:43.479 --> 1:35:46.720
<v Speaker 2>will make them the most money this week, I don't

1:35:46.720 --> 1:35:50.080
<v Speaker 2>see any data that says that's good for all of us.

1:35:49.920 --> 1:35:51.799
<v Speaker 2>It's not. It's not good for any of us except

1:35:52.160 --> 1:35:54.280
<v Speaker 2>the people who need to make the stock price go up.

1:35:54.680 --> 1:35:57.799
<v Speaker 1>Okay, so at one point, if one forgetting the changes

1:35:57.840 --> 1:36:00.800
<v Speaker 1>in government we have Leni Khan now won't enter in

1:36:00.840 --> 1:36:04.599
<v Speaker 1>the new administration. At what point do you say you're

1:36:04.640 --> 1:36:09.080
<v Speaker 1>a monopoly and we should take action? What is the trigger?

1:36:10.360 --> 1:36:13.080
<v Speaker 2>Okay, so I need to reiterate I am not an

1:36:13.120 --> 1:36:15.400
<v Speaker 2>expert in any of this. I know people who are,

1:36:15.880 --> 1:36:19.960
<v Speaker 2>but people who are conservative should and many of them

1:36:19.960 --> 1:36:24.960
<v Speaker 2>are opposed to monopoly power because it's the opposite of

1:36:25.400 --> 1:36:29.360
<v Speaker 2>this idea of small markets and people taking responsibility for

1:36:29.400 --> 1:36:33.559
<v Speaker 2>what they do. And Robert Work and others worked very

1:36:33.600 --> 1:36:38.040
<v Speaker 2>hard to change the definition of what made something a monopoly.

1:36:39.200 --> 1:36:43.400
<v Speaker 2>In the old days, the definition was, by definition, if

1:36:43.439 --> 1:36:48.040
<v Speaker 2>you control a big chunk of something limiting people's choice,

1:36:48.240 --> 1:36:53.640
<v Speaker 2>you're a monopoly. The new definition eventually became, if prices

1:36:53.960 --> 1:36:57.800
<v Speaker 2>are going up, consumers aren't benefiting, now we're going to

1:36:57.840 --> 1:37:02.200
<v Speaker 2>take action. That's not the reason it's not valid is

1:37:02.360 --> 1:37:06.240
<v Speaker 2>prices for some people might go down, but you still

1:37:06.320 --> 1:37:09.920
<v Speaker 2>have all of the hard to measure effects that come

1:37:09.960 --> 1:37:13.519
<v Speaker 2>from a lack of choice. So it is harder today,

1:37:13.560 --> 1:37:17.479
<v Speaker 2>for example, to somebody, for somebody to build a business

1:37:17.479 --> 1:37:20.920
<v Speaker 2>online unless they're going to get an unreasonable amount of

1:37:20.920 --> 1:37:24.479
<v Speaker 2>traffic from Google, so people don't even try, right, It

1:37:24.560 --> 1:37:28.360
<v Speaker 2>is hard today for someone to build an alternative to

1:37:28.439 --> 1:37:33.280
<v Speaker 2>YouTube because they know that it's so deeply ingrained in

1:37:33.360 --> 1:37:37.040
<v Speaker 2>the Google infrastructure that they're never going to get the

1:37:37.040 --> 1:37:40.360
<v Speaker 2>traffic that they need, so they don't try. And what

1:37:40.439 --> 1:37:45.519
<v Speaker 2>we're looking for in a civilized, industrialized world is the

1:37:45.640 --> 1:37:51.120
<v Speaker 2>churn that comes from these innovations. Patents aren't the answer,

1:37:51.560 --> 1:37:56.679
<v Speaker 2>Monopoly power isn't the answer. The answer is people solving

1:37:56.800 --> 1:38:01.720
<v Speaker 2>other people's problems and getting paid for it. And you know,

1:38:01.880 --> 1:38:04.400
<v Speaker 2>we saw what would happen when someone tried to corner

1:38:04.439 --> 1:38:07.000
<v Speaker 2>the market in music. They try every few years. It

1:38:07.000 --> 1:38:09.280
<v Speaker 2>doesn't help anybody except for the person who's trying to

1:38:09.280 --> 1:38:10.000
<v Speaker 2>corner the market.

1:38:10.960 --> 1:38:14.320
<v Speaker 1>Well, staying in music, we have the government suing for

1:38:14.400 --> 1:38:19.200
<v Speaker 1>a breakup in Live Nation and ticket Master. Now, if

1:38:19.240 --> 1:38:23.799
<v Speaker 1>you use the definition of pricing, it will not affect

1:38:23.840 --> 1:38:30.200
<v Speaker 1>price whatsoever. The government's position in the modern era would be, well,

1:38:30.240 --> 1:38:35.040
<v Speaker 1>if you divide them up, it will stimulate innovation. What

1:38:35.200 --> 1:38:36.080
<v Speaker 1>is your thought there?

1:38:36.880 --> 1:38:40.760
<v Speaker 2>Yeah, So the scalping thing is this fascinating understanding of

1:38:40.840 --> 1:38:44.360
<v Speaker 2>supply and demand. And back to this idea of monopoly

1:38:44.800 --> 1:38:49.000
<v Speaker 2>that when only one person is allowed to sell the tickets,

1:38:49.479 --> 1:38:52.559
<v Speaker 2>you have this interesting dilemma that they have. So I

1:38:52.600 --> 1:38:54.920
<v Speaker 2>talked to Bill Graham when he came to Stanford in

1:38:55.000 --> 1:38:57.439
<v Speaker 2>nineteen eighty three, and I was like this young whipper snapper,

1:38:57.439 --> 1:38:58.880
<v Speaker 2>and I raised my hand and he says, what do

1:38:58.880 --> 1:39:02.360
<v Speaker 2>you got? And I said, but you got Springsteen coming

1:39:02.400 --> 1:39:05.360
<v Speaker 2>to San Francisco. You're only charging eighteen dollars a ticket.

1:39:06.560 --> 1:39:08.519
<v Speaker 2>Why are you leaving so much money on the table.

1:39:09.080 --> 1:39:12.600
<v Speaker 2>You could get a hundred, and he said, because I

1:39:12.640 --> 1:39:14.960
<v Speaker 2>book all the concerts in San Francisco. And yeah, I

1:39:14.960 --> 1:39:17.759
<v Speaker 2>could get a hundred for Bruce, but then my customers

1:39:17.760 --> 1:39:20.040
<v Speaker 2>would be out of money by the time we got

1:39:20.080 --> 1:39:24.080
<v Speaker 2>to March. So I'm taking this long view, and I've

1:39:24.120 --> 1:39:28.080
<v Speaker 2>remembered that for a long time, because you're right, when

1:39:28.120 --> 1:39:32.040
<v Speaker 2>you write about the scalpers, someone is gonna charge extra.

1:39:32.200 --> 1:39:36.559
<v Speaker 2>It's this whole lottery mindset doesn't make any sense. But

1:39:36.600 --> 1:39:41.080
<v Speaker 2>that's I don't think at the heart of why you

1:39:41.160 --> 1:39:43.840
<v Speaker 2>want to think about monopoly power with someone like Live

1:39:43.960 --> 1:39:46.599
<v Speaker 2>Nation and Ticketmaster. You're correct, it's not how to get

1:39:46.680 --> 1:39:49.679
<v Speaker 2>rid of the problem of scalpers, even though it makes

1:39:51.520 --> 1:39:54.200
<v Speaker 2>good sense politically to go after it. When you've got

1:39:54.200 --> 1:39:56.920
<v Speaker 2>young people who are obsessed, who are insensed because they

1:39:56.920 --> 1:39:59.679
<v Speaker 2>have to pay so much. I think what we're talking

1:39:59.720 --> 1:40:04.519
<v Speaker 2>about here is what kind of choices and innovations will

1:40:04.520 --> 1:40:09.200
<v Speaker 2>come from those choices when people who are behind the

1:40:09.200 --> 1:40:12.519
<v Speaker 2>scenes here have a choice when they play folks against

1:40:12.520 --> 1:40:17.320
<v Speaker 2>each other. Would Ticketmaster have to lean harder into its

1:40:17.360 --> 1:40:21.439
<v Speaker 2>technology stack to come up with innovative ways to deal

1:40:21.479 --> 1:40:25.000
<v Speaker 2>with scalping if there was someone breathing down their neck?

1:40:26.200 --> 1:40:30.360
<v Speaker 2>And I think history would say yes they would. And

1:40:30.880 --> 1:40:36.400
<v Speaker 2>when you've locked up all the useful venues and contractually

1:40:36.439 --> 1:40:38.920
<v Speaker 2>people can't compete with you, I don't see how that

1:40:38.920 --> 1:40:45.600
<v Speaker 2>comes out in favor of the artists or the fans.

1:40:50.840 --> 1:40:55.640
<v Speaker 1>Staying on the same subject of the touring, one of

1:40:55.640 --> 1:40:58.559
<v Speaker 1>the reasons we have this gap and all this problem

1:40:58.600 --> 1:41:02.280
<v Speaker 1>is the acts believe that if they charge what the

1:41:02.360 --> 1:41:06.480
<v Speaker 1>ticket is worth, they will be perceived in a negative

1:41:06.520 --> 1:41:10.240
<v Speaker 1>way by the fan. What would you tell the act?

1:41:12.479 --> 1:41:12.839
<v Speaker 3>Okay?

1:41:12.880 --> 1:41:19.759
<v Speaker 2>So the principle of permission marketing is delivering anticipated, personal

1:41:19.800 --> 1:41:22.479
<v Speaker 2>and relevant messages that people who want to get them.

1:41:22.880 --> 1:41:23.519
<v Speaker 3>Is the future.

1:41:25.640 --> 1:41:29.320
<v Speaker 2>A lot of what people are interpreting when it comes

1:41:29.320 --> 1:41:33.639
<v Speaker 2>to this ticketing thing is that the artist has no

1:41:34.000 --> 1:41:37.840
<v Speaker 2>understanding of who the fan is. That I gave a

1:41:37.880 --> 1:41:41.320
<v Speaker 2>talk at Columbia Records a few years ago and I

1:41:41.320 --> 1:41:43.720
<v Speaker 2>held up a Dylan album from sixty five and at

1:41:43.720 --> 1:41:47.160
<v Speaker 2>the back it said you could write to Bob at

1:41:47.160 --> 1:41:52.400
<v Speaker 2>this address. They threw all the letters in the trash.

1:41:53.080 --> 1:41:54.760
<v Speaker 2>Of course they did, what were they going to do

1:41:54.800 --> 1:42:00.000
<v Speaker 2>with them? But now artists can directly connect to fans.

1:42:02.080 --> 1:42:06.200
<v Speaker 2>If you can imagine a scenario where fans that are

1:42:06.240 --> 1:42:09.479
<v Speaker 2>connected to the artists for the long haul and demonstrate it,

1:42:10.200 --> 1:42:13.719
<v Speaker 2>get tickets at a price that makes sense for them,

1:42:13.960 --> 1:42:17.080
<v Speaker 2>you have differentiated the audience. If some of them want

1:42:17.120 --> 1:42:19.559
<v Speaker 2>to turn around and scalp it, well they got a

1:42:19.560 --> 1:42:21.920
<v Speaker 2>prize for being a fan for a long time. But

1:42:22.400 --> 1:42:25.080
<v Speaker 2>most of them won't, and so you will end up

1:42:25.080 --> 1:42:28.320
<v Speaker 2>with the right people in the room who know that

1:42:28.680 --> 1:42:31.800
<v Speaker 2>the ticket was worth a lot because someone offered them

1:42:31.840 --> 1:42:33.839
<v Speaker 2>a bunch of money on their way in. That builds

1:42:34.160 --> 1:42:37.760
<v Speaker 2>your fan base for the long haul. But what I'm

1:42:38.000 --> 1:42:40.439
<v Speaker 2>trying to highlight here is there's a technology thing that's

1:42:40.520 --> 1:42:42.960
<v Speaker 2>new that's missing from the old way of thinking about it,

1:42:43.000 --> 1:42:46.000
<v Speaker 2>which is, instead of finding fans for my music, let

1:42:46.000 --> 1:42:49.160
<v Speaker 2>me find music for my fans. And if a fan

1:42:49.280 --> 1:42:51.960
<v Speaker 2>can demonstrate that they're really a fan and I can

1:42:52.479 --> 1:42:56.200
<v Speaker 2>take them on that journey that benefits all of us.

1:42:56.720 --> 1:43:00.680
<v Speaker 2>And so I don't know practically how I would do it,

1:43:00.720 --> 1:43:03.120
<v Speaker 2>particularly for up and coming groups, but I would imagine

1:43:03.120 --> 1:43:07.840
<v Speaker 2>it would be something like, there's a talking heads to

1:43:07.920 --> 1:43:11.120
<v Speaker 2>our coming dire straits is going to open for them.

1:43:11.520 --> 1:43:14.000
<v Speaker 2>As a result, they get to piggyback along on that

1:43:14.080 --> 1:43:17.720
<v Speaker 2>attention and that trust, and so the artists become more

1:43:17.720 --> 1:43:22.160
<v Speaker 2>of a kingmaker because their taste extends and their circles

1:43:22.200 --> 1:43:27.400
<v Speaker 2>grow again. We've taken out the selfish middleman and flattened

1:43:27.439 --> 1:43:29.280
<v Speaker 2>it a little bit. But I'm making all this up.

1:43:29.360 --> 1:43:32.439
<v Speaker 1>I don't know, Okay, going something more in your air

1:43:32.479 --> 1:43:36.559
<v Speaker 1>of expertise. Clayton Christensen, who's no longer with us, wrote

1:43:36.600 --> 1:43:41.719
<v Speaker 1>the book Innovator's Dilemma, which was about disrupting yourself before

1:43:41.920 --> 1:43:46.240
<v Speaker 1>you are disrupted. Now, just staying this a little inside baseball,

1:43:47.000 --> 1:43:51.080
<v Speaker 1>there was professor at Harvard said, there's no such thing

1:43:51.120 --> 1:43:54.360
<v Speaker 1>really as disruption. So what's your take on all of this?

1:43:55.080 --> 1:43:57.000
<v Speaker 2>He said, there's no such thing as disruption?

1:43:57.960 --> 1:44:02.679
<v Speaker 1>She went. He said, yes, I believe that's the woman,

1:44:02.800 --> 1:44:06.439
<v Speaker 1>But I don't want to saying that. If you look

1:44:06.520 --> 1:44:09.960
<v Speaker 1>back at history, all these companies that they said were

1:44:10.000 --> 1:44:15.120
<v Speaker 1>disrupted ultimately one in the end. Let's leave that aside. Okay,

1:44:15.640 --> 1:44:20.160
<v Speaker 1>let's talk about Clayton Christensen. Do you believe his philosophy

1:44:20.400 --> 1:44:24.280
<v Speaker 1>was correct?

1:44:24.960 --> 1:44:27.280
<v Speaker 2>Western Union had the chance to buy AT and T

1:44:28.680 --> 1:44:32.960
<v Speaker 2>and they didn't. They made better telegrams instead. And I

1:44:33.000 --> 1:44:34.720
<v Speaker 2>was at Yahoo when they had the chance to buy

1:44:34.720 --> 1:44:41.759
<v Speaker 2>Google for ten million dollars and they didn't. The reason

1:44:42.760 --> 1:44:48.200
<v Speaker 2>there's this challenge is that innovations at first always suck,

1:44:49.479 --> 1:44:54.320
<v Speaker 2>and compared to the polished, perfect and profitable thing you've

1:44:54.320 --> 1:44:57.200
<v Speaker 2>already got, it's very hard to say, oh, no, no,

1:44:57.240 --> 1:44:59.400
<v Speaker 2>we're going to do that. It's very hard for GM

1:44:59.840 --> 1:45:02.280
<v Speaker 2>to say we're going to make the first generation of

1:45:02.320 --> 1:45:05.759
<v Speaker 2>electric cars because it doesn't match their culture, it doesn't

1:45:05.800 --> 1:45:08.720
<v Speaker 2>match their strategy, and so you end up going to

1:45:08.760 --> 1:45:11.760
<v Speaker 2>all these meetings where you have to justify it. It

1:45:11.800 --> 1:45:15.200
<v Speaker 2>gets dumbed down, averaged out, and someone else with less

1:45:15.200 --> 1:45:20.040
<v Speaker 2>to lose goes ahead and does it instead of you.

1:45:20.960 --> 1:45:26.360
<v Speaker 2>And this challenge happens over and over and over again,

1:45:27.200 --> 1:45:32.320
<v Speaker 2>and being willing to start with it in a way

1:45:32.960 --> 1:45:38.360
<v Speaker 2>that makes the powerful people uncomfortable is very tricky. So

1:45:38.479 --> 1:45:43.400
<v Speaker 2>another Netflix story, so Ted and Reid decide after they've

1:45:43.400 --> 1:45:48.439
<v Speaker 2>beaten Blockbuster that the only threat that Netflix has for

1:45:48.560 --> 1:45:52.040
<v Speaker 2>the near future is streaming because Netflix is making all

1:45:52.040 --> 1:45:56.000
<v Speaker 2>those DVDs in the red envelopes they want, but someone

1:45:56.200 --> 1:45:58.599
<v Speaker 2>they believe is going to come up with a streaming

1:45:58.600 --> 1:46:02.880
<v Speaker 2>solution and wipe them out. So they decide they're going

1:46:02.960 --> 1:46:06.320
<v Speaker 2>to do it. And this is a classic innovator's dilemma

1:46:06.400 --> 1:46:11.519
<v Speaker 2>problem because remember DVDs, they're perfect, the video is really

1:46:11.560 --> 1:46:14.519
<v Speaker 2>high quality, the technology has all worked out. They know

1:46:14.600 --> 1:46:16.839
<v Speaker 2>exactly what to do. They're buying them from the studios

1:46:16.880 --> 1:46:20.880
<v Speaker 2>and they're making a fortune. So Ted and Reid start

1:46:20.920 --> 1:46:25.120
<v Speaker 2>this project. And the first rule is this. No one

1:46:25.520 --> 1:46:28.920
<v Speaker 2>in the DVD division at Netflix, which accounts for one

1:46:29.040 --> 1:46:32.280
<v Speaker 2>hundred percent of their profit, no one is allowed from

1:46:32.320 --> 1:46:34.679
<v Speaker 2>that division to come to the meetings.

1:46:35.280 --> 1:46:37.000
<v Speaker 3>Think about that.

1:46:37.000 --> 1:46:40.160
<v Speaker 2>That's when Netflix became Netflix. That was an act of

1:46:40.200 --> 1:46:43.840
<v Speaker 2>brilliance because they knew that the DVD people were in

1:46:43.880 --> 1:46:47.160
<v Speaker 2>the room. They'd have to average it out, dumb it down,

1:46:47.400 --> 1:46:50.559
<v Speaker 2>keep it small, and they yeah, it doesn't look as

1:46:50.600 --> 1:46:52.559
<v Speaker 2>good as a DVD, and we're not gonna make as

1:46:52.640 --> 1:46:55.439
<v Speaker 2>much money as a DVD. But they didn't have to

1:46:55.520 --> 1:46:57.560
<v Speaker 2>have those meetings because they weren't involved.

1:46:58.720 --> 1:47:01.479
<v Speaker 1>Well, staying on that same point point is one would

1:47:01.560 --> 1:47:05.400
<v Speaker 1>remember the transition. They announced that they were streaming company.

1:47:06.120 --> 1:47:10.400
<v Speaker 1>They were ahead of the consumer. The consumer revolted, then

1:47:10.479 --> 1:47:14.800
<v Speaker 1>they blinked, then they went back to streaming. If you

1:47:15.160 --> 1:47:18.120
<v Speaker 1>are a company, you know, I look at streaming music.

1:47:19.000 --> 1:47:23.080
<v Speaker 1>Streaming Music when it launched in America was way ahead

1:47:23.120 --> 1:47:26.759
<v Speaker 1>forgetting Rhapsody before, but Spotify, which really changed the game.

1:47:27.320 --> 1:47:32.160
<v Speaker 1>It was ahead of what the public wanted. So to

1:47:32.240 --> 1:47:35.400
<v Speaker 1>what degree do you consider the public? To what degree

1:47:35.439 --> 1:47:37.719
<v Speaker 1>do you plan to get the public in your hand?

1:47:38.080 --> 1:47:39.040
<v Speaker 1>What are your thoughts on that?

1:47:40.280 --> 1:47:43.559
<v Speaker 2>Which public? Which public? Is the key to all of

1:47:43.600 --> 1:47:47.880
<v Speaker 2>these things. So I got online in nineteen seventy six.

1:47:48.479 --> 1:47:52.040
<v Speaker 2>I was Prodigy's first contractor in the nineteen eighties, and

1:47:52.120 --> 1:47:56.160
<v Speaker 2>I showed Prodigy to people and they said, that's stupid,

1:47:56.680 --> 1:48:01.479
<v Speaker 2>that'll never work. And if Prodigy hadn't shan changed, that's correct,

1:48:01.560 --> 1:48:06.040
<v Speaker 2>it never would have worked. But which people? There were

1:48:06.240 --> 1:48:09.000
<v Speaker 2>some people who said this is for me, and I'm

1:48:09.040 --> 1:48:12.040
<v Speaker 2>going to tell other people, particularly as it grows, because

1:48:13.160 --> 1:48:16.880
<v Speaker 2>what you're not trying to solve is what's the expression

1:48:16.960 --> 1:48:21.440
<v Speaker 2>of the solution. You're trying to identify what's the insatiable

1:48:22.280 --> 1:48:26.559
<v Speaker 2>whole the project, the problem that I can begin to

1:48:26.760 --> 1:48:30.640
<v Speaker 2>solve for customers. If I can begin to solve it,

1:48:30.760 --> 1:48:35.240
<v Speaker 2>I get traction, and customer traction is the key. If

1:48:35.240 --> 1:48:38.080
<v Speaker 2>you're an A and R person, what you want to

1:48:38.120 --> 1:48:42.200
<v Speaker 2>know is the fans of this band. How often do

1:48:42.240 --> 1:48:44.439
<v Speaker 2>they come back? Not how many fans do they have,

1:48:45.080 --> 1:48:46.760
<v Speaker 2>how often do they come back, and who do they

1:48:46.760 --> 1:48:49.280
<v Speaker 2>bring with them? Because if the answer is they don't

1:48:49.280 --> 1:48:51.160
<v Speaker 2>come back and they don't bring anyone with them, it's

1:48:51.200 --> 1:48:54.840
<v Speaker 2>a stiff. But even if they only have a thousand fans,

1:48:55.320 --> 1:48:57.680
<v Speaker 2>but they can't stop showing up and talking about it,

1:48:58.840 --> 1:49:00.360
<v Speaker 2>Now you have something that's in an innovation.

1:49:02.640 --> 1:49:06.080
<v Speaker 1>Okay, when did you decide that you were going to

1:49:06.160 --> 1:49:07.800
<v Speaker 1>blog every day?

1:49:09.840 --> 1:49:13.240
<v Speaker 2>So I started blogging on a platform before this one

1:49:13.360 --> 1:49:18.360
<v Speaker 2>and before that one in the nineteen nineties or just

1:49:18.400 --> 1:49:22.880
<v Speaker 2>around two thousand and It was just a way of

1:49:22.920 --> 1:49:25.680
<v Speaker 2>telling the skeptical people I was related to that I

1:49:25.760 --> 1:49:28.760
<v Speaker 2>wasn't doing nothing all day. It was just like an

1:49:28.840 --> 1:49:30.160
<v Speaker 2>update as to what was going on.

1:49:30.920 --> 1:49:35.400
<v Speaker 1>Wait, let's slow down, my Literally, the skeptical people you

1:49:35.439 --> 1:49:39.960
<v Speaker 1>were related to, meaning you were family, were they down

1:49:40.040 --> 1:49:42.679
<v Speaker 1>on you because it was a dip in your career,

1:49:42.840 --> 1:49:46.919
<v Speaker 1>or they couldn't understand the whole world of the internet.

1:49:47.080 --> 1:49:47.920
<v Speaker 1>What was going on?

1:49:48.080 --> 1:49:50.160
<v Speaker 2>Yeah, I mean it began as an email newsletter in

1:49:50.200 --> 1:49:53.519
<v Speaker 2>the nineties. It was I had no no, no, what

1:49:53.720 --> 1:49:57.240
<v Speaker 2>was going on in your family? No, I'm getting driven right, Okay, okay.

1:49:57.600 --> 1:50:02.280
<v Speaker 2>I hadn't sold my company. It was struggle. I didn't

1:50:02.280 --> 1:50:04.799
<v Speaker 2>have a job with a name, and there were plenty

1:50:04.800 --> 1:50:05.639
<v Speaker 2>of people who were.

1:50:05.479 --> 1:50:06.360
<v Speaker 3>Like, what do you do?

1:50:06.720 --> 1:50:10.559
<v Speaker 2>So I could write these letters. These not that different

1:50:10.600 --> 1:50:13.679
<v Speaker 2>than I left this letter to people saying is this

1:50:13.760 --> 1:50:16.960
<v Speaker 2>I tried this, this didn't work, blah blah blah. And

1:50:17.000 --> 1:50:20.400
<v Speaker 2>then sometimes I was Once I had this new platform,

1:50:20.479 --> 1:50:21.880
<v Speaker 2>I was doing it two or three times a day,

1:50:23.160 --> 1:50:29.960
<v Speaker 2>and I discovered that there was a voice that sounded

1:50:30.120 --> 1:50:33.160
<v Speaker 2>like my blog voice. The first one hundred posts, I

1:50:33.160 --> 1:50:35.760
<v Speaker 2>probably only had two that sounded like me. If you

1:50:35.840 --> 1:50:37.800
<v Speaker 2>go back and you look at the one on my

1:50:37.880 --> 1:50:41.320
<v Speaker 2>visit to the Apple Store, that's the one where I thought, oh,

1:50:41.360 --> 1:50:45.240
<v Speaker 2>I sound like this now on my blog. And what

1:50:45.360 --> 1:50:50.600
<v Speaker 2>I didn't want to do was regularly decide if a

1:50:50.640 --> 1:50:54.120
<v Speaker 2>blog post was good enough to post. So I made

1:50:54.160 --> 1:50:57.400
<v Speaker 2>the decision once that there's gonna be a blog post

1:50:57.439 --> 1:51:01.000
<v Speaker 2>tomorrow now because it's my best but because it's tomorrow.

1:51:01.880 --> 1:51:05.880
<v Speaker 2>And once I made that decision once, oh, it was

1:51:05.960 --> 1:51:08.640
<v Speaker 2>so great because then all day you're imagining what are

1:51:08.640 --> 1:51:10.599
<v Speaker 2>you going to do for tomorrow's post because there's going

1:51:10.680 --> 1:51:13.920
<v Speaker 2>to be a post, and having that hole to fill

1:51:15.040 --> 1:51:18.559
<v Speaker 2>transform my writing, and it transformed the ability I had

1:51:18.640 --> 1:51:21.519
<v Speaker 2>to have a conversation in front of people.

1:51:22.240 --> 1:51:24.800
<v Speaker 1>But that can be a burden. You can wake up

1:51:24.840 --> 1:51:26.559
<v Speaker 1>and you can say, well, I got to have something

1:51:26.600 --> 1:51:29.080
<v Speaker 1>for tomorrow. If I knock it off at ten am,

1:51:29.439 --> 1:51:31.720
<v Speaker 1>I'm free for the rest of the day. If it's

1:51:31.760 --> 1:51:34.360
<v Speaker 1>eight pm and I haven't written anything yet, what am

1:51:34.400 --> 1:51:34.880
<v Speaker 1>I going to do?

1:51:35.600 --> 1:51:36.080
<v Speaker 3>Yeah?

1:51:36.160 --> 1:51:40.040
<v Speaker 2>And so that burden is called work, and that's what

1:51:40.080 --> 1:51:43.080
<v Speaker 2>I wanted was to sign up for it. I needed

1:51:43.080 --> 1:51:45.880
<v Speaker 2>a hack once I got to a thousand, because when

1:51:45.880 --> 1:51:47.439
<v Speaker 2>they got to a thousand and I went, oh, I

1:51:47.479 --> 1:51:50.360
<v Speaker 2>have a streak here. Now I'm up to almost ten thousand.

1:51:50.360 --> 1:51:52.400
<v Speaker 2>I have a streak here. I don't want to get

1:51:52.439 --> 1:51:55.559
<v Speaker 2>the flu and blow my streak. So I figure out

1:51:55.600 --> 1:51:59.240
<v Speaker 2>how to queum up. So now I can take a

1:51:59.280 --> 1:52:00.680
<v Speaker 2>day or two. Often there's still going to be a

1:52:00.680 --> 1:52:04.040
<v Speaker 2>post tomorrow. But what I do is every night before

1:52:04.040 --> 1:52:07.080
<v Speaker 2>I go to bed, I read tomorrow's post. At about

1:52:07.080 --> 1:52:09.280
<v Speaker 2>one out of five times, I delete it and just

1:52:09.320 --> 1:52:10.120
<v Speaker 2>write a whole new thing.

1:52:11.840 --> 1:52:17.879
<v Speaker 1>Okay, how do you feel about repeating concepts and ideas?

1:52:18.800 --> 1:52:21.760
<v Speaker 2>If I'm not doing that, I'm making a mistake. I

1:52:21.800 --> 1:52:24.040
<v Speaker 2>gotta be repeating ideas and concepts.

1:52:24.080 --> 1:52:24.680
<v Speaker 3>This is not.

1:52:26.760 --> 1:52:29.479
<v Speaker 2>A demonstration of how creative I am. This is me

1:52:29.640 --> 1:52:38.599
<v Speaker 2>Teaching and pedagogy is about repetition, consistency, frequency, and helping

1:52:38.680 --> 1:52:41.240
<v Speaker 2>people like My best blog posts are very simple. My

1:52:41.320 --> 1:52:43.599
<v Speaker 2>best blog posts are I tell you something you already

1:52:43.600 --> 1:52:45.720
<v Speaker 2>know in a way that makes it easy for you

1:52:45.800 --> 1:52:47.000
<v Speaker 2>to tell your friends.

1:52:47.479 --> 1:52:48.479
<v Speaker 3>That's what I'm trying to do.

1:52:49.240 --> 1:52:51.200
<v Speaker 1>But every once in a while, I mean, I have

1:52:51.400 --> 1:52:56.880
<v Speaker 1>still have bookmarked your original permission marketing post, and you

1:52:56.920 --> 1:52:58.840
<v Speaker 1>wrote one a couple of weeks ago that I wrote

1:52:58.880 --> 1:53:01.599
<v Speaker 1>about that really made a huge impact. What is it

1:53:01.720 --> 1:53:03.720
<v Speaker 1>like when you do this is something I don't know.

1:53:03.720 --> 1:53:06.200
<v Speaker 1>Maybe you'll agree with me, maybe you won't. When you

1:53:06.280 --> 1:53:10.400
<v Speaker 1>do something that's in eleven, you know you've been doing

1:53:10.439 --> 1:53:13.760
<v Speaker 1>it so long you're never gonna write something terrible. But

1:53:14.000 --> 1:53:16.519
<v Speaker 1>every once in a while, you write something transcend, it's

1:53:16.520 --> 1:53:19.880
<v Speaker 1>the nature of doing it. Does it bother you that

1:53:19.960 --> 1:53:22.040
<v Speaker 1>you sort of can only do it once. If you're

1:53:22.080 --> 1:53:23.800
<v Speaker 1>a musician, if you write a hit song, you go

1:53:23.840 --> 1:53:26.759
<v Speaker 1>on the road for forty years and play that song. Okay,

1:53:27.400 --> 1:53:29.439
<v Speaker 1>do you ever feel I wrote it? It was great,

1:53:29.920 --> 1:53:31.720
<v Speaker 1>and now tomorrow it's another thing?

1:53:33.120 --> 1:53:35.479
<v Speaker 2>You know, Bob, There's two answers to this. The first

1:53:35.520 --> 1:53:40.360
<v Speaker 2>part is I will write an eleven and no one

1:53:40.360 --> 1:53:41.040
<v Speaker 2>else will know.

1:53:42.560 --> 1:53:42.640
<v Speaker 3>That.

1:53:42.800 --> 1:53:46.959
<v Speaker 2>I have no clue which posts people.

1:53:46.760 --> 1:53:47.360
<v Speaker 3>Are gonna love.

1:53:47.960 --> 1:53:49.120
<v Speaker 1>None.

1:53:49.760 --> 1:53:53.919
<v Speaker 2>And the second one is when I do write something

1:53:54.200 --> 1:53:58.920
<v Speaker 2>that resonates, I don't forget it. It shows up on podcasts,

1:53:59.000 --> 1:54:01.479
<v Speaker 2>it shows up when I'm on stage, it shows up

1:54:01.479 --> 1:54:05.960
<v Speaker 2>in a book, And so I'm you know, no, I

1:54:05.960 --> 1:54:07.840
<v Speaker 2>don't get to play free Bird all the time. But

1:54:07.920 --> 1:54:09.519
<v Speaker 2>I also don't have the problem of having to play

1:54:09.520 --> 1:54:14.120
<v Speaker 2>free Bird all the time. But I have riffs that

1:54:14.240 --> 1:54:18.160
<v Speaker 2>become the fabric of the foundational thing I'm talking about,

1:54:18.840 --> 1:54:21.040
<v Speaker 2>And when I'm on stage and I know, I get

1:54:21.080 --> 1:54:22.600
<v Speaker 2>to bring up the next one because I don't have

1:54:22.640 --> 1:54:25.240
<v Speaker 2>a script. When I bring it, I'm like, oh, this

1:54:25.360 --> 1:54:29.200
<v Speaker 2>is great. And every once in a while it'll stop

1:54:29.240 --> 1:54:32.400
<v Speaker 2>working and oh I love that one. It's gone now,

1:54:33.040 --> 1:54:36.280
<v Speaker 2>So there's that. But I disagree. I don't know when

1:54:36.280 --> 1:54:37.360
<v Speaker 2>I write an eleven, I.

1:54:37.240 --> 1:54:41.280
<v Speaker 1>Wrote, okay, to what degree does feedback affect you?

1:54:43.320 --> 1:54:45.400
<v Speaker 2>So there's no comments on my blog There used to

1:54:45.440 --> 1:54:50.200
<v Speaker 2>be comments. What I found was within a week I

1:54:50.280 --> 1:54:54.520
<v Speaker 2>was writing differently because I was anticipating the comments and

1:54:54.680 --> 1:54:58.840
<v Speaker 2>writing to avoid that criticism. Whatever I thought would happen,

1:54:59.320 --> 1:55:03.320
<v Speaker 2>and my writing went to shit. And so I said,

1:55:03.360 --> 1:55:05.360
<v Speaker 2>I'm not gonna have true choices. I can either have

1:55:06.320 --> 1:55:09.600
<v Speaker 2>a blog with comments and no blog posts or a

1:55:09.640 --> 1:55:12.520
<v Speaker 2>blog with blog posts and no comments. And I went

1:55:12.600 --> 1:55:14.960
<v Speaker 2>with blog posts. And I don't regret it one bit.

1:55:15.160 --> 1:55:17.160
<v Speaker 2>I don't know how you do what you do. It's

1:55:17.160 --> 1:55:20.600
<v Speaker 2>a miracle. You and I are completely different in this respect.

1:55:21.040 --> 1:55:27.000
<v Speaker 2>And then Amazon reviews, A one star review from an

1:55:27.040 --> 1:55:32.560
<v Speaker 2>anonymous person who didn't get the joke would really unsettle me,

1:55:32.600 --> 1:55:34.880
<v Speaker 2>because a one star review doesn't mean it I didn't

1:55:34.920 --> 1:55:36.880
<v Speaker 2>do a good job. It means it wasn't for them,

1:55:38.120 --> 1:55:42.200
<v Speaker 2>and I haven't learned anything from that. So I stopped

1:55:42.200 --> 1:55:44.480
<v Speaker 2>reading my one star reviews. But if you didn't do that,

1:55:44.520 --> 1:55:46.520
<v Speaker 2>you have to stop reading your five star reviews. So

1:55:46.560 --> 1:55:49.040
<v Speaker 2>I haven't read an Amazon review in seven or ten

1:55:49.120 --> 1:55:52.480
<v Speaker 2>years unless someone emails it to me, which I don't want.

1:55:52.280 --> 1:55:52.760
<v Speaker 3>Them to do.

1:55:53.520 --> 1:55:56.320
<v Speaker 1>Okay, but you're not someone who lives in complete isolation.

1:55:56.920 --> 1:56:02.160
<v Speaker 1>You're out doing gigs whatever. There are some greatest hits.

1:56:02.200 --> 1:56:04.720
<v Speaker 1>I'm sure people come up to you and go, you

1:56:04.760 --> 1:56:09.120
<v Speaker 1>know what you wrote about X. Yeah, I read Okay,

1:56:09.200 --> 1:56:11.880
<v Speaker 1>Purple Cow, Yes, which you've been. But my point is

1:56:12.400 --> 1:56:16.680
<v Speaker 1>just go because I'm interested. You don't know when you

1:56:16.760 --> 1:56:18.280
<v Speaker 1>hit it way out of the park.

1:56:18.920 --> 1:56:22.480
<v Speaker 2>When it's just me in my underwear, no idea. So

1:56:23.560 --> 1:56:26.800
<v Speaker 2>I don't talk about evolution on stage anymore, and I

1:56:26.840 --> 1:56:29.000
<v Speaker 2>hardly blog about it. I wrote a book it took

1:56:29.080 --> 1:56:33.280
<v Speaker 2>me nine hours a day for a year called Survival

1:56:33.360 --> 1:56:36.480
<v Speaker 2>Is Not Enough. Charles Darwin wrote the forward. I am

1:56:36.680 --> 1:56:40.600
<v Speaker 2>super proud of that book. And whenever I start talking

1:56:40.600 --> 1:56:43.760
<v Speaker 2>about sexual selection and mutation and all the stuff that

1:56:43.800 --> 1:56:47.800
<v Speaker 2>I know a lot about crickets, just the room, just

1:56:48.320 --> 1:56:51.560
<v Speaker 2>people's eyes glaze over. They do not want to go

1:56:51.640 --> 1:56:55.120
<v Speaker 2>to the next level of understanding how ideas are like

1:56:55.280 --> 1:56:58.760
<v Speaker 2>jeans and all that stuff. And I get talk about

1:56:58.760 --> 1:57:00.800
<v Speaker 2>it all day and people don't want me to.

1:57:00.840 --> 1:57:03.760
<v Speaker 3>So I don't. It's done. But when I wrote it,

1:57:03.800 --> 1:57:04.240
<v Speaker 3>I was like.

1:57:04.720 --> 1:57:08.120
<v Speaker 2>This is Nobel prize stuff, this is this is an eleven.

1:57:09.320 --> 1:57:09.640
<v Speaker 3>Nothing.

1:57:10.960 --> 1:57:15.800
<v Speaker 1>Okay, you know in my particular case, certainly when it

1:57:15.840 --> 1:57:18.760
<v Speaker 1>comes to politics in the national vibe, I get that

1:57:18.920 --> 1:57:23.080
<v Speaker 1>from the feedback. Having said that, I understand your concept completely.

1:57:23.160 --> 1:57:26.560
<v Speaker 1>It is inhibiting getting the feedback and wrestling with that

1:57:27.360 --> 1:57:31.480
<v Speaker 1>all of the time. So how do you put your

1:57:31.560 --> 1:57:34.920
<v Speaker 1>finger on the pulse? How do you take the temperature?

1:57:35.000 --> 1:57:37.840
<v Speaker 1>What is your input?

1:57:38.640 --> 1:57:41.680
<v Speaker 2>So I mean, I'm meeting hundreds of blog posts a day,

1:57:42.080 --> 1:57:45.160
<v Speaker 2>and I'm in the world and I talk to people.

1:57:45.360 --> 1:57:49.960
<v Speaker 2>But here's my thesis. Most people have been indoctrinated if

1:57:50.000 --> 1:57:53.280
<v Speaker 2>they see something they don't understand to just walk on by.

1:57:54.640 --> 1:57:57.520
<v Speaker 2>If there's something in the world that is illogical to

1:57:57.600 --> 1:58:00.120
<v Speaker 2>me that is working, but I don't think it should work.

1:58:00.560 --> 1:58:03.360
<v Speaker 2>That isn't working, but I think it should work. I

1:58:03.400 --> 1:58:05.920
<v Speaker 2>can't let it go. I have to sit and look

1:58:06.000 --> 1:58:11.200
<v Speaker 2>and look and look until I have a thesis. And

1:58:11.360 --> 1:58:17.360
<v Speaker 2>that exploration is the fuel for a lot of my work.

1:58:17.760 --> 1:58:20.880
<v Speaker 2>Please explain to me how the culture ended up like.

1:58:20.840 --> 1:58:25.240
<v Speaker 1>This, and before we know, what's the status of your stereo?

1:58:26.200 --> 1:58:31.680
<v Speaker 2>So I built speakers and some two A three two

1:58:31.720 --> 1:58:36.920
<v Speaker 2>bamps that I got that are handmade, and of course

1:58:36.920 --> 1:58:40.320
<v Speaker 2>Paul McGowan built all the stack on the streaming side.

1:58:40.720 --> 1:58:45.360
<v Speaker 2>But these speakers, which I painted in Evecline blue, combined

1:58:45.400 --> 1:58:49.880
<v Speaker 2>with the three watt per channel amps. Just like I

1:58:49.960 --> 1:58:52.560
<v Speaker 2>used to buy you speakers a new set every three

1:58:52.560 --> 1:58:56.120
<v Speaker 2>to five months on audio Gone done with that, I

1:58:56.120 --> 1:58:59.560
<v Speaker 2>haven't had a new set of speakers in three years.

1:58:59.080 --> 1:59:02.800
<v Speaker 2>It's I was listening last night to O brother and

1:59:03.600 --> 1:59:05.760
<v Speaker 2>what a genius t bone was is?

1:59:07.160 --> 1:59:09.960
<v Speaker 3>They sound great? It makes me very happy.

1:59:10.160 --> 1:59:15.560
<v Speaker 1>Okay, Well, in the chain the sound is affected definitively

1:59:16.080 --> 1:59:18.240
<v Speaker 1>by the speaker. We can talk about everything that comes

1:59:18.280 --> 1:59:24.760
<v Speaker 1>before that will colors, but every speaker inherently sounds different. Correct, Okay,

1:59:25.360 --> 1:59:28.080
<v Speaker 1>So what is it about these speakers that, with all

1:59:28.120 --> 1:59:31.839
<v Speaker 1>the experiences you've had, you finally decide this is the one?

1:59:32.280 --> 1:59:32.600
<v Speaker 1>All right?

1:59:32.640 --> 1:59:34.120
<v Speaker 2>So the most I ever spent on a pair of

1:59:34.160 --> 1:59:38.280
<v Speaker 2>speakers was sixty thousand dollars. And the cool thing about

1:59:38.320 --> 1:59:40.800
<v Speaker 2>Audiogon is you can buy a used pair of speakers

1:59:41.120 --> 1:59:43.120
<v Speaker 2>and sell them for what you pay for them. So

1:59:43.160 --> 1:59:45.400
<v Speaker 2>I've actually broken even pretty much on all of my

1:59:45.480 --> 1:59:50.600
<v Speaker 2>speaker adventures. These speakers are baffleous, which means there's no box.

1:59:51.160 --> 1:59:53.360
<v Speaker 2>You've got the driver, which is a hole in a

1:59:53.400 --> 1:59:57.600
<v Speaker 2>big sheet of butcher block, and this the front and

1:59:57.640 --> 2:00:00.680
<v Speaker 2>the back are both exposed to the outside world. And

2:00:01.360 --> 2:00:05.080
<v Speaker 2>that means they're super fast because they're not pushing against

2:00:05.160 --> 2:00:09.960
<v Speaker 2>the compressed air inside the box. And because they're so

2:00:10.040 --> 2:00:13.600
<v Speaker 2>efficient ninety eight dB efficient, I only have to give

2:00:13.640 --> 2:00:16.360
<v Speaker 2>them a little tiny bit of power. And the thing

2:00:16.400 --> 2:00:20.720
<v Speaker 2>about amplification is two bamps of the fifties were better

2:00:20.760 --> 2:00:23.040
<v Speaker 2>than almost any ant made today, but they couldn't get

2:00:23.200 --> 2:00:27.360
<v Speaker 2>very loud because they only have a few watts per channel.

2:00:27.440 --> 2:00:31.680
<v Speaker 2>So when the transistor came along, the manufacturers loved it

2:00:31.680 --> 2:00:33.280
<v Speaker 2>because they could give you one hundred two hundred, four

2:00:33.320 --> 2:00:35.880
<v Speaker 2>hundred wats and it only cost them four bucks. So

2:00:37.440 --> 2:00:40.440
<v Speaker 2>by going backwards with the tubes, I got the chance

2:00:40.480 --> 2:00:44.320
<v Speaker 2>to get that sweetness. Maybe it's not completely realistic, but

2:00:44.400 --> 2:00:48.680
<v Speaker 2>it sounds so nice. So it's the bafflus, it's the

2:00:48.760 --> 2:00:52.880
<v Speaker 2>high efficiency, it's the quick speed, and it's the fact

2:00:52.920 --> 2:00:55.480
<v Speaker 2>that I'm in the sweet spot of what the tube

2:00:55.480 --> 2:00:55.840
<v Speaker 2>can do.

2:00:56.680 --> 2:01:02.360
<v Speaker 1>Okay, you built your own speakers, who designed them, who

2:01:02.440 --> 2:01:07.080
<v Speaker 1>decided on the components, right, So there's only one driver,

2:01:07.920 --> 2:01:12.320
<v Speaker 1>and there's no crossover, so the tweeter, the woofer, the midrange,

2:01:12.360 --> 2:01:16.760
<v Speaker 1>they're all one thing. And it's two brothers in China

2:01:16.880 --> 2:01:21.240
<v Speaker 1>who are audiophiles who decided to use Chinese ability to

2:01:21.400 --> 2:01:24.200
<v Speaker 1>make things much cheaper than they should be, but to

2:01:24.240 --> 2:01:27.720
<v Speaker 1>spend a lot to make these drivers. So the drivers

2:01:27.760 --> 2:01:33.520
<v Speaker 1>cost six hundred dollars a pair, and if they were

2:01:33.560 --> 2:01:36.480
<v Speaker 1>made in the US, they would probably cost twenty thousand

2:01:36.520 --> 2:01:38.800
<v Speaker 1>dollars a pair. So about the six hundred dollars pair

2:01:38.800 --> 2:01:43.280
<v Speaker 1>of drivers and everything else is just me screwing things together. Okay,

2:01:43.640 --> 2:01:48.040
<v Speaker 1>so they're full spectrum one driver fuir spectrum. Can I

2:01:48.040 --> 2:01:50.000
<v Speaker 1>ask how many inches they are across?

2:01:50.160 --> 2:01:50.920
<v Speaker 3>Twelve inches?

2:01:51.960 --> 2:01:55.240
<v Speaker 2>And I'm looking on my web here to tell you

2:01:55.280 --> 2:02:01.839
<v Speaker 2>the name of the company because it's been a little while. Aldo, Okay,

2:02:02.000 --> 2:02:08.600
<v Speaker 2>it's called Lee Song l II, And what you're looking

2:02:08.640 --> 2:02:11.720
<v Speaker 2>for is, oh, they're down to three hundred and ninety

2:02:11.760 --> 2:02:16.000
<v Speaker 2>nine dollars. They're the Lie Song fifteen inch full range

2:02:16.040 --> 2:02:16.680
<v Speaker 2>speaker driver.

2:02:18.400 --> 2:02:21.360
<v Speaker 1>And then you decided how large a piece of wood

2:02:21.400 --> 2:02:22.960
<v Speaker 1>and how to installment or they get tell.

2:02:22.840 --> 2:02:24.960
<v Speaker 2>You, no, I built a whole enclosure and I tried

2:02:25.000 --> 2:02:30.560
<v Speaker 2>different approaches and it's not that hard because there aren't

2:02:30.560 --> 2:02:31.360
<v Speaker 2>that many choices.

2:02:32.520 --> 2:02:34.640
<v Speaker 1>And then what do you use for source?

2:02:35.480 --> 2:02:41.480
<v Speaker 2>So I used to have a huge collection of CDs,

2:02:41.520 --> 2:02:43.680
<v Speaker 2>and then for a while I got into vinyl, but

2:02:43.760 --> 2:02:47.320
<v Speaker 2>I found I kept coming back to streaming using Rune,

2:02:48.120 --> 2:02:50.400
<v Speaker 2>which is a piece of software that everybody who loves

2:02:50.440 --> 2:02:54.480
<v Speaker 2>music should have. Are n And what Rone does is

2:02:54.520 --> 2:02:59.680
<v Speaker 2>it's the interface between title and cobas as your sources

2:03:00.480 --> 2:03:05.920
<v Speaker 2>and the streaming box. And it's this beautiful interface that

2:03:06.000 --> 2:03:08.720
<v Speaker 2>lets you see album art and all about the album.

2:03:08.960 --> 2:03:12.360
<v Speaker 2>It's really lovely. It makes listening to music more fun

2:03:12.560 --> 2:03:15.480
<v Speaker 2>and it also suggests the next song I want to

2:03:15.520 --> 2:03:17.720
<v Speaker 2>listen to, and it's very smart about that. It's not

2:03:17.760 --> 2:03:20.200
<v Speaker 2>being used against me because I paid for it. There's

2:03:20.200 --> 2:03:26.160
<v Speaker 2>no ADS, there's no nobody's getting payola. It just works.

2:03:26.560 --> 2:03:29.680
<v Speaker 2>And so I've got that thing running next to a

2:03:29.720 --> 2:03:33.760
<v Speaker 2>box from PS Audio, and the PS audio box is

2:03:33.760 --> 2:03:39.560
<v Speaker 2>the thing that takes the Ethernet cable and turns it

2:03:39.640 --> 2:03:45.360
<v Speaker 2>into an analog signal, and then that analog signal goes

2:03:45.840 --> 2:03:49.600
<v Speaker 2>to an amp. Now, the thing about the amps. The

2:03:49.640 --> 2:03:53.640
<v Speaker 2>amps come from a website called hi Fi Shark, which

2:03:53.680 --> 2:03:57.520
<v Speaker 2>I also strongly recommend everybody. High Fi Shark is where

2:03:57.560 --> 2:04:00.720
<v Speaker 2>all the people who are into this trade use stuff

2:04:00.880 --> 2:04:05.920
<v Speaker 2>back and forth with each other, and it collects all

2:04:05.960 --> 2:04:08.240
<v Speaker 2>of these different sites that have stuff. So you can

2:04:08.280 --> 2:04:12.040
<v Speaker 2>set a search inside Hi Fi Shark that will send

2:04:12.080 --> 2:04:16.240
<v Speaker 2>you an email every time one of these things comes

2:04:16.280 --> 2:04:19.240
<v Speaker 2>up for sale. And so I'm looking now and I

2:04:19.280 --> 2:04:23.760
<v Speaker 2>can see Bottlehead makes. There's one there, here's an audio

2:04:23.800 --> 2:04:28.360
<v Speaker 2>note one that's super fancy, and I like to find

2:04:28.480 --> 2:04:32.240
<v Speaker 2>the ones that are mostly hand built by hobbyists. But

2:04:32.400 --> 2:04:35.160
<v Speaker 2>building at two a three am outside of my area

2:04:35.160 --> 2:04:38.280
<v Speaker 2>of expertise is something that a really good hobbyist has

2:04:38.320 --> 2:04:39.040
<v Speaker 2>no trouble doing.

2:04:40.840 --> 2:04:44.680
<v Speaker 1>And just because you mentioned about the ads, what do

2:04:44.760 --> 2:04:48.600
<v Speaker 1>you believe about Netflix adding an advertising tier?

2:04:49.600 --> 2:04:51.480
<v Speaker 2>Okay, so what Netflix is trying to do now is

2:04:51.640 --> 2:04:54.160
<v Speaker 2>pick up all the crumbs they might have missed first

2:04:54.160 --> 2:04:57.360
<v Speaker 2>time around. And what they're going to have to do

2:04:57.640 --> 2:05:00.240
<v Speaker 2>to make sure they do it in an intelligent way

2:05:00.880 --> 2:05:07.040
<v Speaker 2>is cripple the ad experience enough that people can afford

2:05:07.120 --> 2:05:10.960
<v Speaker 2>and want to pay for. Netflix will because they'll always

2:05:11.000 --> 2:05:13.440
<v Speaker 2>make more money from that than they will from ads,

2:05:14.280 --> 2:05:18.760
<v Speaker 2>and then get enough people to watch the ad part

2:05:19.240 --> 2:05:21.960
<v Speaker 2>that they can get enough advertisers who will pay extra.

2:05:22.840 --> 2:05:27.480
<v Speaker 2>And this is critical because bottom fishing ads the kind

2:05:27.520 --> 2:05:31.520
<v Speaker 2>you see on late night TV wreck the viewing experience,

2:05:31.560 --> 2:05:34.000
<v Speaker 2>which means fewer people watch them, which means that they

2:05:34.000 --> 2:05:34.760
<v Speaker 2>wreck it further down.

2:05:34.760 --> 2:05:35.480
<v Speaker 3>It's a race to the.

2:05:35.400 --> 2:05:39.400
<v Speaker 2>Bottom where you want to super Bowl ads, where advertisers

2:05:39.440 --> 2:05:42.120
<v Speaker 2>pay extra to be in front of a lot of people.

2:05:42.960 --> 2:05:47.280
<v Speaker 2>So I think Netflix's plan is to keep differentiating so

2:05:47.320 --> 2:05:50.200
<v Speaker 2>that people like me and maybe you will pay their

2:05:50.240 --> 2:05:53.680
<v Speaker 2>twenty or thirty bucks a month and then build a

2:05:53.720 --> 2:05:57.520
<v Speaker 2>big enough audience that you won't see YouTube ads, you'll

2:05:57.520 --> 2:06:00.320
<v Speaker 2>see super Bowl ads on the rest.

2:06:00.680 --> 2:06:05.680
<v Speaker 1>Well, if we you know, basically Netflix blinked after a

2:06:05.720 --> 2:06:09.680
<v Speaker 1>bad quarter, if we we wound the tape, do you

2:06:09.800 --> 2:06:12.840
<v Speaker 1>think adding an advertising tier was wise?

2:06:14.800 --> 2:06:17.400
<v Speaker 2>Again, I guess it comes down to what kind of

2:06:17.440 --> 2:06:19.720
<v Speaker 2>company do you want to build? And you know, as

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<v Speaker 2>we bring this around to this where we started, if

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<v Speaker 2>you're going to be owned by short term thinkers in

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<v Speaker 2>the stock market, you have really dumb people as your bosses.

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<v Speaker 2>And Netflix enjoyed this really significant and rapid rise. They're

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<v Speaker 2>much better at something like that than I would ever be.

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<v Speaker 2>But if you want to build a company you're proud of.

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<v Speaker 2>I don't think you want advertisers, and I don't think

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<v Speaker 2>you want short term owners. I think you want to

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<v Speaker 2>be able to say we are beholden not to advertisers,

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<v Speaker 2>but to our viewers who are paying us, and we

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<v Speaker 2>want owners that are going to stick around so that

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<v Speaker 2>we can build that Because the goal of a company

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<v Speaker 2>shouldn't be to make as much money as possible for

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<v Speaker 2>the people who own it today. It should be to

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<v Speaker 2>do work you're proud of.

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<v Speaker 1>And I'm proud of the wisdom you've dropped on us today, Seth.

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<v Speaker 1>I want to thank you so much for taking this

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<v Speaker 1>time spending it with my audience.

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<v Speaker 2>Bob, you are such a mention. You are a national treasure.

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<v Speaker 2>And to find someone who I like so much, who

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<v Speaker 2>thinks so differently from me, what a treat. Thank you

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<v Speaker 2>for having me. There's a bucket list item.

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<v Speaker 1>Well, now you're raising a lot of questions, but that'll

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<v Speaker 1>be another time in terms of thinking differently in any event,

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<v Speaker 1>until next time, this is Bob Luff sets